NEW YORK, June 16, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for the Western District of Washington on behalf of shareholders who purchased or otherwise acquired the securities of Cray, Inc. ("Cray "or the "Company") (Nasdaq:CRAY) (XETRA:TE4) (Stuttgart:TE4) (Berlin:TE4) (Frankfurt:TE4) (Munich:TE4) between July 31, 2003 and May 12, 2005, inclusive (the "Class Period").
The complaint alleges that during the Class Period Cray and certain of the Company's executive officers issued materially false and misleading financial statements to the investing public regarding its financial outlook, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder.
Cray, Inc. designs, develops, markets, and services high-performance computer systems commonly known as supercomputers. During the Class Period, defendants made materially false and misleading statements regarding the Company's business, product development and financial performance. Unbeknownst to public investors, the true facts, which defendants knew and/or recklessly disregarded and failed to disclose to the investing public during the Class Period, included: (i) that the Company's internal controls were inadequate, and failed in several key aspects, which included inadequate review of third-party contracts and lack of software application controls and documentation; (ii) as a consequence of the above, it was difficult for the Company to manage basic operational tasks, such as the development of software applications, or customer requirements and specifications for systems per contract; and (iii) that defendants' statements with respect to Cray's status and progress were lacking in any reasonable basis when made. As a result of the defendants' false statements, Cray's stock price traded at inflated levels during the Class Period, thereby damaging investors.
On March 16, 2005, Cray disclosed that it was delaying the filing of its 2004 annual report with the SEC due to an ongoing review of the Company's internal controls. In its announcement, the Company stated that it "expects that it will identify one or more material weaknesses, including inadequate review of third-party contracts and lack of software application controls and documentation." The news caused Cray shares to plummet more than 25%, to close on Mach 17, 2005, at $2.23 per share.
On May 9, 2005, Cray reported financial results for the first quarter ended March 31, 2005, including a $21.0 million loss, or $0.24 per share -- compared to a net loss of $3.8 million, or $0.05 per share in the first quarter last year. This news caused Cray's share price to decline another 29%, to close on May 10, 2005 at $1.47 per share.
If you purchased or otherwise acquired Cray securities on any world exchange between July 31, 2003 and May 12, 2005, and sustained damages, you may, no later than July 25, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Christopher Hinton of Murray, Frank & Sailer LLP.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.