HARTFORD, Conn., April 12 – LAWFUEL – The Law News Network — The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action
status has been filed in the United States District Court for the Northern
District of California on behalf of all persons who purchased the publicly
traded securities of Blue Coat Systems (Nasdaq: BCSI) (“Blue Coat” or “the
Company”) between February 20, 2004 and May 27, 2004, inclusive (the “Class
Period”).
The Complaint alleges that Blue Coat and certain of its officers and
directors violated federal securities laws by issuing material
misrepresentations. Specifically, defendants announced an unprecedented
increase in sales and Blue Coat’s first profitable quarter. The defendants,
knowing that gross margins impact profitability, stated that gross margins
would fall into the range of 68 to 69% in the fourth quarter of fiscal 2004.
While defendants knew that their gross margin levels were unrealistic, CEO
NeSmith sold 127,877 shares for proceeds of $5.57 million and CFO Verheeke
sold 21,400 shares for proceeds of $1,009,000.
On May 27, 2004, Blue Coat announced that its gross margin calculations
had fallen short for the fourth quarter of fiscal 2004, and that profitability
was lower than that achieved in the third quarter. Instead of increasing only
2-3%, operating expenses increased 8.5%. On this news, Blue Coat shares
plummeted $11.45 per share to close at $27.80 on May 28, 2004. During the
Class Period, Blue Coat traded as high as $65.71.
In the summer of 2004, the SEC launched an informal inquiry into trading
in Blue Coat’s stock concerning the fourth quarter of 2004. On February 28,
2005, the SEC subpoenaed two unidentified company executives to testify.
Recently, the SEC upgraded its informal investigation to a formal
investigation.
If you are a member of the class, you may, no later than June 10, 2005,
request that the Court appoint you as lead plaintiff of the class. A lead
plaintiff is a class member that acts on behalf of other class members in
directing the litigation. Although your ability to share in any recovery is
not affected by the decision whether or not to seek appointment as a lead
plaintiff, lead plaintiffs make important decisions which could affect the
overall recovery for class members, including decisions concerning settlement.
The securities laws require the Court to consider the class member(s) with the
largest financial interest as presumptively the most adequate lead
plaintiff(s).
For more information about the case, its claims, and your rights, please
contact Schatz & Nobel toll-free: (800) 797-5499, or by e-mail:
sn06106@aol.com. To view a copy of the Complaint initiating the class action,
which was not filed by Schatz & Nobel, or for more information about this
case, class action cases in general, or Schatz & Nobel, please visit
http://www.snlaw.net.
CONTACT:
Wayne T. Boulton or Nancy A. Kulesa
Tel.: (800) 797-5499
Website: http://www.snlaw.net
e-mail: sn06106@aol.com
Web Site: http://www.snlaw.net
