| Company: | Witness Systems, Inc. |
| Ticker Symbol: | NASD: WITS |
| Class Period: | April 23, 2004 to August 11, 2006 |
| Date Filed: | Aug-15-06 |
| Lead Plaintiff Deadline: | Oct-14-06 |
| Court: | Northern District, GA |
| Allegations: |
A securities fraud class action complaint has been filed in the United States District Court for the Northern District of Georgia against Witness Systems, Inc. ("Witness Systems" or the "Company") (NASDAQ:WITS), David B. Gould, Nicholas Discombe, William Evans, Joel G. Katz, Thomas J. Crotty, and Loren Wimpfheimer. The case was filed on behalf of a proposed class of persons who purchased or otherwise acquired Witness Systems stock between April 23, 2004, and August 11, 2006, inclusive (the "Class Period") and were allegedly damaged thereby.
The complaint alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder by failing to disclose to the investing public that the defendants had engaged in the backdating of stock options grants to certain officers of the Company and by failing to account properly for expenses arising from the backdating. The complaint further alleges that defendants thus violated Generally Accepted Accounting Principles and filed false and misleading reports with the Securities and Exchange Commission. The complaint also contends that one or more of the defendants engaged in substantial and suspicious insider trading while in possession of material, non-public knowledge of the alleged backdating scheme.
On July 27, 2006, defendant Evans, the Company's Chief Financial Officer, disclosed that the Company was reviewing its stock options grants. On August 8, 2006, the Company announced that its Board of Directors had formed a special committee to investigate the stock option practices because the Company had identified some "discrepancies." The Company delayed the filing of its Form 10-Q for the period ending June 30, 2006, pending the outcome of the investigation. The Company admitted that it "believes it will need to record additional non-cash charges for stock-based compensation expense in prior periods . . . (which) will total approximately $10 million." As a result of the internal investigation, the Board stated that the Company's previously issued financial statements from February 2000 through June 30, 2006, should no longer be relied upon. Just three days later, on August 11, 2006, the Company disclosed that it intended to restate its prior financials and revealed that NASDAQ informed it on August 11 that the Company may be subject to delisting as a result of the matters disclosed thus far.
The price of Witness Systems common stock has fallen from its July 27, 2006, closing price of $18.19 per share to as low as $12.76 per share. The stock closed at $12.91 per share on August 11, 2006.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
The complaint alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder by failing to disclose to the investing public that the defendants had engaged in the backdating of stock options grants to certain officers of the Company and by failing to account properly for expenses arising from the backdating. The complaint further alleges that defendants thus violated Generally Accepted Accounting Principles and filed false and misleading reports with the Securities and Exchange Commission. The complaint also contends that one or more of the defendants engaged in substantial and suspicious insider trading while in possession of material, non-public knowledge of the alleged backdating scheme.
On July 27, 2006, defendant Evans, the Company's Chief Financial Officer, disclosed that the Company was reviewing its stock options grants. On August 8, 2006, the Company announced that its Board of Directors had formed a special committee to investigate the stock option practices because the Company had identified some "discrepancies." The Company delayed the filing of its Form 10-Q for the period ending June 30, 2006, pending the outcome of the investigation. The Company admitted that it "believes it will need to record additional non-cash charges for stock-based compensation expense in prior periods . . . (which) will total approximately $10 million." As a result of the internal investigation, the Board stated that the Company's previously issued financial statements from February 2000 through June 30, 2006, should no longer be relied upon. Just three days later, on August 11, 2006, the Company disclosed that it intended to restate its prior financials and revealed that NASDAQ informed it on August 11 that the Company may be subject to delisting as a result of the matters disclosed thus far.
The price of Witness Systems common stock has fallen from its July 27, 2006, closing price of $18.19 per share to as low as $12.76 per share. The stock closed at $12.91 per share on August 11, 2006.
If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.
