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Quest Software Acknowledges "Computational Error" in Revenue Recognition |
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A class action has been filed against Quest Software, Inc. (Nasdaq: QSFT) and certain of its officers and directors by stockholders who purchased the company's common stock between April 30, 2002, and July 23, 2003. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
Quest provides application and information availability software solutions that enhance the performance and reliability of e-business, enterprise and custom applications and enable the delivery of information across the enterprise. The action alleges that during this time period, the defendants caused Quest's shares to trade at artificially inflated levels through the issuance of false and misleading financial statements. On July 23, 2003, Quest revealed that its 2002 and first-quarter 2003 results were false when issued due to a "computational error" in revenue recognition. The stock dropped below $9 per share on this news.
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