NEW YORK, Jan. 23, 2009 (GLOBE NEWSWIRE) -- The Brualdi Law Firm, P.C. announces that a lawsuit has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of securities of Rackable Systems, Inc. ("Rackable" or the "Company") (Nasdaq:RACK), between October 30, 2006 and April 4, 2007, inclusive (the "Class Period").
No class has yet been certified in the above action. Until a class is certified, you are not represented by counsel unless you retain one. If you purchased Rackable securities during the Class Period, and wish to move the court for appointment of lead plaintiff, you must do so by March 17, 2009. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. The lead plaintiff will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. You do not need to seek appointment as a lead plaintiff in order to share in any recovery.
To be a member of the class you need not take any action at this time, and you may retain counsel of your choice. 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 Sue Lee at The Brualdi Law Firm, P.C. 29 Broadway, Suite 2400, New York, New York 10006, by telephone toll free at (877) 495-1187 or (212) 952-0602, by email to slee@brualdilawfirm.com or visit our website at http://www.brualdilawfirm.com.
The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Rackable's business, operations and prospects were materially false and misleading. Specifically, the Complaint alleges that defendants' public statements were false and misleading or failed to disclose or indicate the following: (1) that the Company was experiencing competitive pressure; (2) that competition was increasing; (3) that, due to increasing competition, the Company was able to maintain and expand its customer base only by aggressively lowering its contract prices; (4) that, as such, the Company was experiencing dramatic erosion of gross margin attainment in the Company's largest accounts as focused competitors aggressively dropped prices; (5) that price increases for DDR (double data rate) memory were accelerating faster than the Company represented to investors; (6) that, as a result of the above, the Company was unlikely to meet its quarterly gross margin targets; (7) that the Company lacked effective internal and financial controls; and (8) as a result of the foregoing, that statements made by the Company and management during the Class Period concerning the Company's business, operations and prospects were lacking any reasonable basis.