FalconStor Software Inc (NASDAQ: FALC) Investor Securities Class Action Lawsuit 10/01/2010

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Company Name(s): 
FalconStor Software
Case Name: 
FalconStor Software Shareholder Class Action Lawsuit 10/01/2010
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: FALC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/01/2010
Class Period Begin: 
03/12/2008
Class Period End: 
09/29/2010
Court of Filing: 
U.S. District Court for the Eastern District of New York
Deadline To File for Lead: 
11/30/2010
Date Settled: 
11/01/2013
Settlement Amount: 
$5,000,000
Deadline to Participate in Settlement: 
01/20/2014
Summary: 

April 11, 2014 - The court approved the settlement, entered the orders approving the plan of allocation and the motion for attorneys’ fees and expenses.

March 3, 2014 - The court held a final settlement hearing.

November 1, 2013 - The court preliminarily approved the settlement.

June 14, 2013 - Parties filed a stipulation of settlement.

March 22, 2013 - The defendants withdrew the motion to dismiss.

January 18, 2012 - The defendants filed a motion to dismiss.

December 19, 2011 - The lead plaintiff filed a second amended complaint.

November 3, 2011 - The lead plaintiff filed an amended complaint on behalf of purchasers of FalconStor Software Inc (NASDAQ: FALC) common shares between March 12, 2008 and September 29, 2009. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between March 12, 2008 and September 29, 2009.

August 29, 2011 - The lead plaintiff and lead counsel were appointed.

November 30, 2010 - Lead plaintiff motions were filed.

November 5, 2010 - All cases were consolidated.

October 1, 2010 - An investor in shares of FalconStor Software Inc (NASDAQ: FALC) filed a lawsuit in the U.S. District Court for the Eastern District of New York over alleged violations of Federal Securities Laws Laws in connection with certain allegedly false and misleading statements made between February 5, 2009 and September 29, 2010.

According to the complaint the plaintiff alleges on behalf of purchasers ofFalconStor Software Inc (NASDAQ:FALC) common stock during the period between February 5, 2009 and September 29, 2010, that FalconStor Software Inc and certain of its officers and directors violated the Securities Exchange Act of 1934 by issuing between February 5, 2009 and September 29, 2010 materially false and misleading statements regarding FalconStor Software Inc’s business and its prospects.

On September 29, 2010, FalconStor Software Inc disclosed that its President, CEO and Chairman of the Board, ReiJane Huai, resigned from all of his positions with FalconStor Software Inc, effective immediately. According to FalconStor Software Inc's statement, "Mr. Huai tendered his resignation following his disclosure that certain improper payments were allegedly made in connection withFalconStor Software Inc's contract with one customer. FalconStor Software Inc has fully cooperated with law enforcement authorities with respect to the ongoing investigation, and it will continue to do so. In addition, a special committee of the Board has been formed to conduct a full internal investigation of these matters and the special committee has retained counsel to assist it in its investigation." Shares of FalconStor Software Inc (NASDAQ: FALC) declined following the announcement from $3.98 per share to $2.64 per share, almost the lowest trading price during 2008 or almost 34% decline during September 29, 2010.

Shares of FalconStor Software Inc (NASDAQ: FALC) traded during 2006 at almost $10 per share. During 2007 FALC shares reached its all time high of $13.95 per share, before declined in 2008 to as low as $2.15 per share. During 2009 FALC shares were able to regain value and reached over $5 per share. Its current 52weekHigh was at $5 per share.

FalconStor Software Inc, located in Melville, New York, is a provider of disk-based data protection. FalconStor Software Inc delivers data protection solutions that facilitate the availability of business-critical data. FalconStor Software Inc reported an increase in its 12 month revenue from $55.06million in 2006 to $89.46million in 2009. Nevertheless its Net Income for the same time periods stayed at a Net Loss of $3.38million, respectively $3.09million in 2009.