According to a press release dated June 3, 2011, the complaint charges CSC and certain of its officers and directors with violations of the Securities Exchange Act of 1934. CSC is a leader in the information technology and professional services industry.
The complaint alleges that during the Class Period, defendants made false and misleading statements about the Company’s financial condition and prospects. As a result of defendants’ false statements, CSC stock traded at artificially inflated prices, reaching a high of $56.54 per share during the Class Period.
On February 1, 2011, CSC issued a press release announcing that the SEC had initiated a formal investigation into accounting irregularities at the Company. On May 2, 2011, the Company announced its fourth quarter 2011 financial results and reported that it was close to an agreement with the United Kingdom’s National Health Service (“NHS”) on a revised contract and updated its fiscal 2011 guidance, announcing that it would miss its reduced fiscal 2011 revenue expectations by $100 million and earnings expectations by $0.45 per share. Then, on May 25, 2011, after the market closed, the Company issued a press release preannouncing its fourth quarter and fiscal 2011 financial results. Among other things, the Company reported fourth quarter 2011 earnings results of $1.09 per share, which missed Wall Street consensus estimates of $1.16, and that fiscal 2011 earnings would be below the Company’s recent reduced forecast of $4.75 per share. In addition, the Company also disclosed that its Audit Committee had begun an internal investigation into accounting irregularities in one of its service sectors. In response to the Company’s May 25, 2011 disclosures, on May 26, 2011, the Company’s stock price fell $5.71 per share (or 12%) to close at $38.38 per share.
According to the complaint, the Class Period representations by defendants concerning the financial condition and prospects for CSC were each materially false and misleading when made because they failed to disclose the true facts, which were then known to or recklessly disregarded by defendants, including: (a) the Company’s historical and current financial results from its Managed Services Sector, which had been incorporated into the Company’s consolidated financial statements, were false and in violation of the Company’s internal accounting policies and Generally Accepted Accounting Principles; (b) the implementation of the Company’s Lorenzo 1.9 software at the NHS was experiencing severe technical difficulties, rendering the Company unable to meet its customer contract milestones such that the entirety of the contract was at risk of termination; (c) the Company was experiencing significant weakness in demand for its products and services, and bookings for new business for its products were declining; and (d) in light of (a)-(c) above, there was no reasonable basis for the fiscal 2011 revenue, earnings, bookings and margin forecasts made to the public during the Class Period.
On August 29, ,2011, the Court issued an Order Consolidating the several actions under the new case title In Re Computer Sciences Corporation Securities Litigation. Further, the Court issued an Order appointing Lead Plaintiff and Approving Lead Counsel.
On August 29, 2012, the Court issued an Order granting in part and denying in part Defendants' motion to dismiss. Plaintiffs were given leave to replead.
On November 30, 2012, the Court issued an Order granting plaintiff's motion for class certification.
On May 15, 2013, the Parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on May 24.
On September 20, 2013, the Court issued an Order awarding attorneys' fees and expenses. This was followed by a Final Order and Judgment dismissing this case with prejudice.