LOS ANGELES, April 12, 2005 (PRIMEZONE) -- Notice is hereby given by Glancy Binkow & Goldberg LLP that a Class Action lawsuit was filed in the United States District Court for the Northern District of California on behalf of a class (the "Class") consisting of all persons or entities who purchased or otherwise acquired securities of Blue Coat Systems, Inc. ("Blue Coat" or the "Company") (Nasdaq:BCSI) during the period February 20, 2004 to May 27, 2004 (the "Class Period").
A copy of the Complaint is available from the court or from Glancy Binkow & Goldberg LLP. Please contact us by phone to discuss this action or obtain a copy of the Complaint at (310) 201-9150 or Toll Free at (888) 773-9224, by email at info@glancylaw.com, or visit our website at www.glancylaw.com.
The Complaint charges Blue Coat, and certain of the Company's executive officers with violations of federal securities laws. Plaintiff claims defendants' omissions and material misrepresentations artificially inflated the Company's stock price, inflicting damages on investors. Blue Coat is a developer and distributor of "proxy" software, which helps corporations control employee access to Internet websites and to potentially dangerous downloadable files. The Complaint alleges that, from its founding in 1996 through the beginning of the Class period, Blue Coat had never turned a profit. On February 19, 2004, Blue Coat announced an unprecedented increase in sales, and its first profitable quarter. During a public conference call that same day, defendants stated a belief that gross margins in the following quarter would fall in the range of 68-69%. This news drove the stock price up to $38.27 on February 20, 2004, on unusually high volume of 1.3 million shares. Unbeknownst to investors, these gross margin calculations did not reflect any realistic expectations as to what could be achieved, given material business issues of which the defendants would have been aware. Almost immediately following the February 19 conference call, certain defendants began selling large blocks of shares, at prices ranging from $40-52 per share.
On May 27, 2004, Blue Coat made a surprise announcement that its purported gross margin calculations had fallen short for the fourth quarter of fiscal 2004 and profitability was lower than that achieved in the third quarter. The next trading day, May 28, 2004, Blue Coat shares plummeted $11.45 per share to close at $27.80 per share. By August 2004, Blue Coat shares fell as low as $10 per share before recovering to approximately the $20 level.
In the summer of 2004, the SEC began an informal inquiry into trading of Blue Coat stock in or about the fourth quarter of fiscal 2004, which the Company initially characterized as involving only "individuals or organizations outside the company." By early 2005, however, the SEC had upgraded its inquiry to a formal investigation. Instead of only individuals or organizations outside the Company, the SEC was now focusing on "whether certain present or former officers, directors, employees, affiliates or others made intentional or non-intentional selective disclosure of material nonpublic information, traded in the Company's stock while in possession of such information, or communicated such information to others who thereafter traded in the Company's stock."
Plaintiff seeks to recover damages on behalf of Class members and is represented by Glancy Binkow & Goldberg LLP, a law firm with significant experience in prosecuting class actions, and substantial expertise in actions involving corporate fraud.
If you are a member of the Class described above, you may move the Court, not later than June 13, 2005, to serve as lead plaintiff, however, you must meet certain legal requirements. If you wish to discuss this action or have any questions concerning this Notice or your rights or interests with respect to these matters, please contact Peter A. Binkow, Esquire, of Glancy Binkow & Goldberg LLP, 1801 Avenue of the Stars, Suite 311, Los Angeles, California 90067, by telephone at (310) 201-9150 or Toll Free at (888) 773-9224 or by e-mail to info@glancylaw.com.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca