This is a securities fraud class action lawsuit against Comverse Technologies.
The class action lawsuit alleges that Comverse violated federal securities laws by failing to disclose information regarding the true timing of stock option grants made to key executives. This manipulation of the grant dates permitted the individual defendants to enrich themselves, while artificially inflating net income, operating income and retained earnings. Had the timing not been manipulated, and properly accounted for, these financial measures would have been materially lower.
The class action complaint further alleges that on or around March 14, 2006, Comverse announced the creation of a special committee of its Board of Directors composed of outside directors to review matters relating to the company's stock option grants, the accuracy of the stated dates of option grants and whether all proper corporate procedures were followed. Then, on April 17, 2006, Comverse revealed that it would restate its financial statements for the first three quarters of fiscal 2006, for the 2001-05 fiscal years, and possibly previous periods. The adjustments are expected to be material.
On this news, Comverse stock dropped from $29.15 on March 13, 2006 to $23.31 on April 17, 2006, a decline of over 20%.
Name (Stock Symbol)
Comverse Technology, Inc. (CMVT)
Comverse Technology, Inc. supports telecommunication service providers with hardware and software to allow each to manage their respective networks more efficiently.
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