SafeNet Agrees to Settlement In Shareholder Class Action

You must submit the settlement "Proof" form attached below, in order to participate in this settlement. There is a strict deadline of February 14, 2011 by which all claims must be submitted. The instructions for submitting are included in the "Proof" and the "Notice" files attached below for your download. DO NOT SEND THE FORMS TO THE SHAREHOLDERS FOUNDATION, FOLLOW THE DIRECTIONS IN THE "PROOF".

To have your information reviewed for options and to recieve notifications about this case, please use this form. You may also send an email to mail@shareholdersfoundation.com, or call us at (858) 779-1554.
Company Name(s): 
SafeNet
Case Name: 
SafeNet Class Action 8/1/2006
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: SFNT
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/01/2006
Class Period Begin: 
03/31/2003
Class Period End: 
05/18/2006
Court of Filing: 
U.S. District Court for the Southern District of New York
Date Settled: 
12/20/2010
Settlement Amount: 
$25,000,000
Deadline to Participate in Settlement: 
02/14/2011
Settlement Notice: 
Settlement Proof: 
Summary: 

October 2010 - Please be advised that your rights may be affected by a class action lawsuit pending in this Court if, during the period from March 31, 2003 through May 18, 2006, inclusive, you purchased or otherwise acquired common stock of SafeNet, Inc. (“SafeNet”).

The Court-appointed Lead Plaintiffs, the Police and Fire Retirement System of the City of Detroit, the Plymouth County Retirement System, and the State-Boston Retirement System (“Lead Plaintiffs”), on behalf of the Settlement Class, have reached a proposed settlement of the Litigation for a total of $25,000,000 in cash that will resolve all claims in the Litigation (the “Settlement”).

The parties entered into the formal Stipulation and Agreement of Settlement (the “Stipulation”) on September 13, 2010. On October 7, 2010, the Court preliminarily approved the Settlement, and scheduled the Settlement Hearing to consider whether to grant final approval to the Settlement.

The proposed Settlement, if approved by the Court, will settle claims of all persons and entities that purchased or otherwise acquired common stock of SafeNet from March 31, 2003 through May 18, 2006, inclusive (the “Class Period”), and were allegedly damaged thereby (the “Settlement Class” or “Class”), including all persons and entities that acquired SafeNet common stock in exchange for their shares of Rainbow Technologies, Inc. stock as a result of the March 14, 2004 acquisition of Rainbow Technologies, Inc. by SafeNet (the “Subclass”).

August 2006 - According to a press release dated August 16, 2006, a class action lawsuit was commenced in the United States District Court for the Southern District of New York on behalf of plaintiff Michael J. Golde and all similarly situated purchasers or acquirers of SafeNet, Inc. (“SafeNet” or the “Company”) (NASDAQ: SFNT) common stock during the period between March 31, 2003 to May 18, 2006 (the “Class Period”). The case is captioned Michael J. Golde v. SafeNet, Inc., et al., Case No., 06-CV-6194, and is filed as a related case to a previously filed action, captioned Police & Fire Retirement System of the City of Detroit v. SafeNet, Inc., et al., Case No., 06-CV-5797, which was filed on August 1, 2006, and was assigned to the Honorable Paul A. Crotty. In addition to the claims asserted in the prior action, this action also asserts claims on behalf of the former shareholders of Rainbow Technologies, Inc. (“Rainbow”) who approved the March 2004 merger of Rainbow with SafeNet and who exchanged their shares of Rainbow for shares of SafeNet as a result of the acquisition.
According to a press release dated August 1, 2006, the Complaint alleges that all Defendants violated Section 14(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 14a-9 promulgated thereunder; that Defendants SafeNet and certain Individual Defendants violated Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder; that all of the Individual Defendants violated Section 20(a) of the Exchange Act.
The Complaints allege that during the Class Period, SafeNet and the individual defendants violated the federal securities laws by issuing false and misleading proxy statements and periodic SEC filings. The Complaints also allege that, throughout the Class Period, Defendants improperly administered SafeNet stock option plans to provide themselves with unlawful benefits, which they materially misrepresented and failed to disclose to the public and which they failed to properly account for in SafeNet’s reported financial statements. Defendants’ misrepresentations regarding its stock option grants were disseminated to the public in SafeNet’s annual and quarterly filings, as well as annual proxy statements, throughout the Class Period.
The Complaints further allege that in connection with SafeNet’s solicitation for the approval of its stock-for-stock merger transaction with Rainbow, effectuated on March 15, 2004, SafeNet and certain of the individual defendants issued a false and misleading registration statement and joint proxy statement/prospectus, thereby injuring Rainbow’s shareholders who accepted the terms of the merger exchange. Finally, the Complaints allege that during the second and third quarters of 2005, defendants engaged in improper accounting of revenues and costs relating to certain long-term delivery contracts.
In September 2006, SafeNet announced it had concluded that certain of the Company’s options grants between 2000 and 2005 had been accounted for using incorrect measurement dates. As a result, SafeNet announced its previously reported financial results for the period from 2000 to March 31, 2006 should not be relied upon. In January 2007, the Company declared it would be making additional adjustments to its prior published financial statements due to accounting errors unrelated to the granting of stock options. Then, on March 5, 2007, SafeNet announced the Company agreed to be acquired by an investment group for approximately $634 million. The acquisition was subsequently approved and closed. SafeNet is yet to publish restated financial results. On July 25, 2007, the United States Attorney for the Southern District of New York announced the filing of a criminal indictment against SafeNet’s former Chief Financial Officer Carole Argo for, among other things, engaging in an illegal scheme between 2000 and 2006 to deceive the Company’s Board of Directors and shareholders concerning SafeNet’s systematic backdating of options grants and causing SafeNet to publish false and misleading financial statements as a result of the backdating scheme.