According to the law firm press release, VASCO Data Security International, Inc., together with its subsidiaries, designs, develops, markets, and supports hardware and software security systems that manage and secure access to information assets worldwide. VASCO Data’s computer security subsidiaries include VASCO Data Security, Inc. in Illinois, and VASCO Data Security nv/sa of Belgium. The Company sells its security solutions through its direct sales force, distributors, resellers, and systems integrators.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (1) VASCO’s products were illegally sold to parties in Iran in violation of federal laws prohibiting such sales; (2) the Company lacked adequate internal controls; and (3) as a result of the foregoing, VASCO’s public statements were materially false and misleading at all relevant times.
On July 21, 2015, after the market closed for trading, VASCO filed a Form 8-K with the SEC announcing “that certain of its products which were sold by a VASCO European subsidiary to a third-party distributor may have been resold by the distributor to parties in Iran, potentially including parties” subject to U.S. economic sanctions.
As a result of this news, shares of VASCO fell $0.86, or over 3.22%, on unusually heavy volume, to close at $25.83 on July 22, 2015.