According to the Press Release dated March 30, 2011, Rosetta Stone and certain of its officers and directors violated federal securities laws. Specifically, the Complaint alleges: (i) that Rosetta Stone was facing intense competition for its products, including free competitive product offerings; (ii) that the free and lower priced competitive product offerings, not a temporary reduction in advertising, was having a
material adverse effect on the Company's Class Period revenues, particularly U.S. consumer revenues; (iii) that the favorable sales booking numbers Rosetta Stone reported during the Class Period was the result of key retail partners maintaining inventory of the Company's products well above historic levels; and (iv) that Rosetta
Stone's reported sales bookings and revenues during the Class Period
were the product of manipulation.
On February 28, Rosetta Stone announced fourth quarter revenue of
$74.3 million, a 5% decrease from the prior year, net income on a
GAAP basis of $5.0 million, a decrease of 60% from the 2009 fourth
quarter. On this news, shares of Rosetta Stone fell $1.77 to $13.19
On August 30, 2011, the plaintiff filed a Notice of Voluntary Dismissal with Prejudice. However, on September 7, 2011, District Judge Anthony J. Trenga issued the Order stating that this case remain on the active docket of the Court subject to the outstanding Scheduling Order; and Lead Plaintiff is directed, if it be so advised, to advise the Court of the terms of any settlement, together with a copy of any settlement agreement, as well as any other documents that would permit the Court to make the determinations referenced in this Order.
According to the Order signed by District Judge Anthony J. Trenga on September 19, 2011, the Motion for leave to voluntarily dismiss its claims, with prejudice, under Rule 41(a)(1) by Lead Plaintiff, Town of Davie Police Officers Retirement System is granted. The Court finds that there has been no abuse of the class action procedures, there will be no prejudice to potential class members, and the Retirement System has not violated its fiduciary duties to potential class members. The claims of the Retirement System are hereby dismissed with prejudice. The claims of potential class members are hereby dismissed without prejudice, as moot. Each side shall bear its own fees, costs, and expenses. Notice to the potential class members need not be given.