Kahn Gauthier Swick, LLC (KGS) has announced an initial filing of securities for a class action suit against Shoretel.
According to a press release:
If you purchased shares of ShoreTel in connection with the IPO or if you
purchased shares thereafter in the open market, you are urged to contact
Lewis Kahn, Managing Partner, KGS, toll free 1-866-467-1400, ext. 100, via
cell phone at 504-301-7900, or by email at [email protected] to
learn about your legal rights and how this action may benefit you. For
further information on KGS, please visit www.kgscounsel.com.
ShoreTel, certain of its officers and directors, and the Company’s
underwriters are charged with including, or allowing the inclusion of,
materially false and misleading statements in the Registration Statement
and Prospectus issued in connection with the IPO, in violation of the
Securities Act of 1933.
The Complaint alleges that following ShoreTel’s July 3, 2007 IPO — which
raised gross proceeds of at least $86.3075 million — investors learned the
truth about the Company on January 7, 2008 — including that the problems
which existed at the time of the IPO would result in extremely
disappointing results for the third quarter of fiscal 2008 (the period
ended December 31, 2007), including much lower than expected revenues and
higher than expected costs and expenses. At that time, defendants first
belatedly revealed that sales to new customers were substantially lower
than expected, and that sales to existing customers was not sufficient to
offset these declines. In addition, by this time, it became obvious to
investors that the Company did not maintain adequate internal controls, and
that a proper due diligence investigation into the Company, by the
Underwriters, was not properly carried out prior to the Offering.
On this news, on January 7, 2008, over 6.0 million shares of ShoreTel
traded — over 20 times average daily trading volume — and Company shares
plummeted — falling over 50% to close at $6.02 per share.
If you wish to serve as lead plaintiff in this class action lawsuit, you
must move the Court no later than March 17, 2008. Any member of the
purported class may move the Court to serve as lead plaintiff through
counsel of their choice, or may choose to do nothing and remain an absent
class member. If you would like to discuss your legal rights, you may
e-mail or call KGS Managing Partner Lewis Kahn, without obligation or cost
to you, toll free 1-866-467-1400, ext. 100, or by email at
[email protected] To learn more about KGS, you may visit
http://www.kgscounsel.com. KGS focuses its practice on securities class
action litigation, and has been appointed lead counsel in numerous federal
securities class actions.
While it is not possible to know the outcome of this suit or if it will even take place, going public certainly adds pressure to companies as they have new problems to deal with such as patent issues and class action suits.
It will be interesting to see if this suit reduces the company’s focus on marketing its products and/or hitting its numbers.