Stock Falls to $1.30 While Company Hires New Independent Auditor
SAN DIEGO, July 17/ — Scott + Scott, LLC (http://www.scott-scott.com), which filed a class action in the United States District Court for the District of Washington on behalf of the purchasers of Cray Inc. (Nasdaq: CRAYE; “Cray” or the “Company”) securities between July 31, 2003 and May 12, 2005, inclusive (the “Class Period”), intends to move the Court for lead plaintiff/lead counsel on July 25, 2005. Cray Inc. is engaged in the design, development, marketing and support of high-performance computer systems, commonly known as supercomputers.
If you wish to discuss this action or have questions concerning this notice or your rights, contact Scott + Scott attorneys Neil Rothstein ([email protected]; 619-251-0887 (cellular)) or Amy Saba ([email protected]; 800-332-2259).
The complaint alleges that Cray’s manufacturing processes, internal controls and testing were flawed and ineffective and that Cray’s own auditors and Audit Committee knew of the flawed and ineffective internal controls. Further, the complaint alleges that unknown to investors delays in inventory recognition realization and revenue were a recurring and unpredictable feature of Cray’s business model. Additionally, it is alleged that during the Class Period, Cray failed to disclose and misrepresented that business metrics having a direct bearing on revenue recognition were increasingly unfavorable and unlikely to improve anytime soon.
On May 9, 2005, Cray revealed that it had failed to include an auditor’s opinion on management’s assessment of internal control over financial reporting. Moreover, Cray continued to report revenue results adversely impacted by faulty internal controls and past quarter practices. Cray’s stock price, which was as high as $13.49 during the Class Period closed on May 12, 2005 at $1.34. On July 1, 2005, Cray issued a Form 8-K stating that it had hired a new independent auditor.
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Other cases recently filed by Scott + Scott, LLC include Harley-Davidson, Brocade, DreamWorks, Guidant and more. Scott + Scott, LLC is based at 108 Norwich Avenue, Colchester, CT 06415; phone: 860/537-3818; fax: 860/537-4432.