According to the law firm press release, the complaint charges VeriSign and certain of its officers and directors with violations of the Securities Exchange Act of 1934. VeriSign provides Internet infrastructure services to various networks worldwide. It offers registry services that operate the authoritative directory of .com, .net, .cc, .tv, and .name domain names, as well as the back-end systems for .gov, .jobs, and .edu domain names.
The complaint alleges that throughout the Class Period, defendants highlighted the purported strong growth in VeriSign’s domain name registrations and led the market to believe that 2012 third quarter renewals were progressing with equal vigor. Specifically, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s operational status and financial projections, and failed to disclose the following adverse facts: (a) that challenges to the Company’s registry pricing scheme made it more likely than not that the U.S. Department of Justice (“DOJ”) and Department of Commerce would demand price concessions in exchange for leaving VeriSign in charge of operating the .com and .net networks; (b) VeriSign’s growth in domain name registrations was in decline; (c) VeriSign was relying heavily on revenues from “parking” websites and other dubious websites focused on drawing in and monetizing traffic, rather than in providing cogent business leads; (d) defendants knew that Google and other Internet search engines had been tweaking their algorithms to improve the quality of their search results by ranking lower subpar quality websites, such as those that are not updated often or provide little or no content; (e) subpar domain name owners had stopped renewing their agreements with VeriSign as a result of the Internet search engines’ efforts to discourage them by demonetizing their practices; and (f) as a result, defendants knew VeriSign’s fiscal 2012 earnings guidance was not attainable.
On October 25, 2012, after the close of trading, VeriSign issued a press release announcing the Company’s third quarter 2012 financial results. VeriSign shocked the market by disclosing that the DOJ was reviewing its domain name pricing arrangements and that it was doubtful that the review would be completed in time to allow the Commerce Department to renew its contract before it expired on November 30, 2012. On this news, VeriSign’s stock fell precipitously from its October 25, 2012 closing price of $46.60 per share to close below $40 per share on October 26, 2012, falling $7.21 per share, or 15.47%, on extremely high volume.
On April 12, 2013, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel.
On June 25, 2013, the case was voluntarily dismissed with prejudice.