Allot Communications Ltd. Case 05/01/2007

According to a press release dated May 1, 2007, the complaint charges Allot and certain of its officers, directors and underwriters with violations of the Securities Act of 1933. Allot is a designer, developer, marketer, and seller of broadband service optimization solutions. The Company’s solutions provide broadband service providers and enterprises with real-time visibility into, and control of, network traffic.

The Complaint alleges that the Registration Statement and Prospectus issued in connection with the IPO were negligently prepared and, as a result, contained untrue statements of material facts; omitted to state other facts necessary to make the statements made therein not misleading; and were not prepared in accordance with the rules and regulations governing their preparation. Specifically, the Complaint alleges, among other things, that the Registration Statement and Prospectus included representations that the Company would achieve its goal in becoming the leader in its industry through its ability to market and sell its products to end-customers through its channel partners. In fact, according to the Complaint, the Registration Statement and Prospectus failed to disclose that Allot was experiencing declining sales in its indirect distribution channels, such as enterprise, education and smaller ISP customers, in North America.

On April 2, 2007, Allot issued a press release announcing that revenues and earnings for the first quarter of 2007 and the 2007 fiscal year would be lower than its previous guidance - given less than two months ago. The Company attributed the lower guidance to “weakness in sales from some of the Company’s distributors, principally in the Americas, which are focused on sales to enterprise, education, and smaller ISPs.” In response to the announcement about the Company’s revised guidance, on April 2, 2007, the price of Allot stock declined precipitously falling from $9.15 per share to $7.11 per share - approximately 40% below the IPO price - on heavy trading volume.