BOCA RATON, Fla., May 19, 2022 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the Eastern District of Virginia against Pegasystems Inc. (“PEGA” or the “Company”) (NASDAQ: PEGA) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons or entities that purchased PEGA common stock between May 29, 2020 and May 9, 2022, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action is captioned: City of Fort Lauderdale Police and Firefighters’ Retirement System v. Pegasystems Inc., et al., No. 1:22-cv-00578 (E.D. Va.)
PEGA develops customer relationship management software. In its SEC filings during the Class Period, PEGA consistently informed investors that its internal “research and development organization is responsible for product architecture, core technology development, product testing, and quality assurance.” The Company also stated that it maintained a written Code of Conduct applicable to its board of directors and all employees “including our principal executive officer,” which included an express commitment: “Never [to] use illegal or questionable means to acquire a competitor’s trade secrets or other confidential information, such as . . . stealing, seeking confidential information from a new employee who recently worked for a competitor, or misrepresenting your identity in hopes of obtaining confidential information.”
On May 29, 2020, Appian Corporation (“Appian”), a principal competitor of PEGA, filed a civil complaint in the Circuit Court for Fairfax County, Virginia against PEGA and an employee of a government contractor using Appian software, alleging claims for trade secret misappropriation, violation of the Virginia Computer Crimes Act, tortious interference, and statutory business and common law conspiracy (the “Appian Litigation”). The Appian complaint alleged efforts by PEGA to obtain Appian trade secrets through the contractor’s employee, who had access to Appian’s software and materials. The complaint further alleged that PEGA’s own employees, including its Chief Executive Officer (“CEO”), misrepresented themselves as potential customers of Appian partners to improperly gain access to Appian’s trial software.
Despite the obvious materiality of the Appian Litigation, including its allegation that PEGA had essentially stolen Appian’s trade secrets and caused Appian massive damages, in violation of SEC reporting regulations, for nearly two full years during the Class Period Defendants never disclosed or described the Appian Litigation in its quarterly reports on Form 10-Q or annual reports on Form 10-K. When they did finally discuss the Appian Litigation, Defendants falsely assured investors that the claims asserted in the litigation were “without merit,” PEGA faced no exposure in the litigation because Appian’s alleged damages “are not supported by the necessary legal standard of proximate cause,” and, even if PEGA was found liable, it was “unable to reasonably estimate possible damages.”
The Class Action alleges that, during the Class Period, Defendants misrepresented and/or failed to disclose that: (1) PEGA had engaged in corporate espionage and misappropriation of trade secrets to better compete against Appian; (2) Defendants’ product development and associated success was, in significant part, not the result of its own research and product testing but rather the result of such corporate espionage and trade secret theft; (3) Defendants had engaged in a scheme to steal Appian trade secrets, which was not only known to, but carried out through the personal involvement of PEGA’s CEO; (4) PEGA’s CEO and other officers and employees did not comply with PEGA’s written Code of Conduct; (5) PEGA was “unable to reasonably estimate damages” in the Appian Litigation; and (6) as a result of the foregoing, Defendants’ statements about PEGA’s business, operations, prospects, legal compliance, and potential damages exposure in the Appian Litigation were materially false and/or misleading and/or lacked a reasonable basis when made.
The truth regarding PEGA’s fraudulent conduct was revealed after the close of the markets on May 9, 2022, when PEGA issued a press release announcing that the jury in the Appian Litigation had awarded Appian more than $2 billion for PEGA’s misappropriation of trade secrets. In response to this news, PEGA’s stock price fell 21%, from a closing price of $65.93 per share on May 9, 2022, to a closing price of $52.25 on May 10, 2022. As the market continued to digest the verdict, PEGA’s stock price dropped another 8% to close at $48.07 per share the following day.
If you purchased PEGA common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the Eastern District of Virginia no later than July 18, 2022. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Lester Hooker (lhooker@saxenawhite.com), an attorney and Director at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action.
You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities fraud class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Lester R. Hooker, Esq.
lhooker@saxenawhite.com
Saxena White P.A.
7777 Glades Road, Suite 300
Boca Raton, FL 33434
Tel: (561) 206-6708
Fax: (561) 394-3382
www.saxenawhite.com
