Case Also Brought on Behalf of Purchasers of Notes Convertible to Shares
SAN DIEGO, CA, August 31, 2005 — Scott + Scott, LLC (http://www.scott-scott.com), which filed the first securities fraud action against Mercury Interactive Corporation (“Mercury” or the “Company”) (Nasdaq: MERQE) and individual defendants on August 21, 2005, represents client shareholders in the United States District Court for the Northern District of California (5:05-cv-03395-JF). Purchasers of securities in Mercury during the class period from October 22, 2003 through August 23, 2005 inclusive (the “Class Period”) are members of the purported class. This case is also brought on behalf of those purchasing notes convertible to shares of Company stock, pursuant to the Company’s 0 Coupon Senior Convertible Notes (due 2008 offering). Mercury, an enterprise software company, provides software and services to the business technology optimization marketplace.
If you would like information about Scott + Scott’s complaint, a copy of it — or would like to discuss this action with an attorney, please contact partner Neil Rothstein at nrothstein@scott-scott.com (800/332-2259, ext. 22 or cell 619/251-0887) or attorney Amy K. Saba at asaba@scott-scott.com (800/332-2259, ext. 26).
The complaint alleges that unbeknownst to investors, defendants’ internal controls and corporate compliance during the Class Period were flawed and deficient, causing their stock to trade at artificially inflated levels. Specifically, the complaint alleges that defendants concealed extraordinary auditing expenses in connection with the “highly likely” need to restate earnings for multiple quarters and years.
As a result of the stock price inflation maintained during the lengthy Class Period, defendants achieved lucrative executive bonus compensation and enhanced employment agreements, serving to discourage insider trading. By concealing the Company’s deficient and defective internal controls and corporate compliance, as it is alleged, defendants were also able to assure the successful resale of notes by selling holders in connection with its $500 million convertible notes offering pursuant to the Company’s registration statement/prospectus and themselves selling $6.3 million in Company stock at inflated prices.
Finally, on July 5, 2005, defendants revealed the news about previously undisclosed accounting irregularities and the Company’s ongoing internal investigation and auditing process, a process that had already incurred as much as $1 million in undisclosed expenses. As a result, the price of Mercury tumbled $7.67 or 16.7% from its interim high of $45.88 on May 24, 2005, until the price of the stock bottomed on July 5, 2005. On the news of July 5, 2005, the price of the Company’s stock fell $0.25, to $37.96, on unusually heavy volume of 12.2 million shares, nearly six times average volume. Now, almost two months later, the stock price has fallen even more.
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Case Also Brought on Behalf of Purchasers of Notes Convertible to Sha…
