NEW YORK, June 15, 2005 (PRIMEZONE) -- Wechsler Harwood LLP today announced that it has filed a Federal Securities fraud class action suit on behalf of all purchasers of the common stock of Brocade Communication Systems, Inc. (Nasdaq:BRCD) acquiring the stock between February 21, 2001 and May 15, 2005, both dates inclusive (the "Class Period").
The action, entitled, Sreenivas v. Brocade Communication Systems, Inc., et al., Case No. (not yet assigned), is pending in the United States District Court for the Northern District of California, and names as defendants, the Company and certain of its senior officers and directors. A copy of the complaint can be obtained from the Court or can be viewed on Wechsler Harwood web site at: www.whesq.com.
The Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. More specifically, the complaint alleges that defendants failed to disclose and misrepresented material adverse facts which were known to defendants or recklessly disregarded by them. In particular, the Complaint alleges that during the Class Period defendants: (a) improperly accounted for the cost of stock-based compensation; (b) did not follow appropriate option granting guidelines; and (c) lacked adequate internal controls. As a consequence of the foregoing, the Complaints alleges the Company's financial results were in violation of Generally Accepted Principles and were materially inflated at all relevant times.
On January 6, 2005, Brocade announced that as a result of an internal review it expected to restate its financial statements for fiscal years ending 2002 and 2003 to record additional stock-based compensation expense. The news shocked the market. On January 7, 2005, shares of Brocade fell $0.52 per share or 7.51 percent to close at $6.40 per share. On January 24, 2005, the Brocade announced that it expected to record additional stock-based compensation charges. On this news shares of Brocade fell another $0.57 per share or about 10 percent, on January 24 and January 25, 2005, to close at $5.83 per share. Then, on May 16, 2005, before the markets opened, the Company announced that it will restate its financial statements for the fiscal years ending 2002 through 2004 to record additional charges for stock-based compensation expense. On this news, shares of Brocade fell $0.12 per share or 2.91 percent, on May 17, 2005, to close at $4.01 per share.
If you are a member of the class described above, you may, not later than July 18, 2005 move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Wechsler Harwood, or other counsel of your choice, to serve as your counsel in this action
Wechsler Harwood has taken a leading role in many important actions on behalf of defrauded shareholders. The Wechsler Harwood website (www.whesq.com) has more information about the firm and detailed information regarding this matter. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following:
Wechsler Harwood LLP 488 Madison Avenue, 8th Floor New York, New York 10022 Toll Free Telephone: (877) 935-7400 Craig Lowther, Wechsler Harwood Shareholder Relations Department: clowther@whesq.com
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca