Several class actions have been filed against technology company Verdisys, Inc. (OTC:VDYS.PK; formerly Nasdaq:VDYS) and certain of its officers and directors by stockholders who purchased the company's common stock between August 20, 2003, and March 9, 2004. The actions claim 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.

The complaint names Verdisys, its former Chief Executive Officer, Dan Williams, and the company's former Chief Financial Officer, Andrew Wilson. The action alleges that the defendants failed to disclose: (1) that the company had materially overstated its net income and earnings per share; (2) that the defendants prematurely recognized revenue from contracts between the company, Edge Capital Group, Inc., and Energy 2000 in violation of GAAP and its own revenue recognition policy; (3) that the company lacked adequate internal controls and was therefore unable to ascertain its true financial condition.

On March 10, 2004, the United States Securities and Exchange Commission announced the temporary suspension of trading of the securities of Verdisys at 9:30 a.m. on March 10, 2004, and terminating at 11:59 p.m. on March 23, 2004. The SEC further stated that temporarily suspending trading in the securities of Verdisys was because of questions that had been raised about the accuracy and adequacy of publicly disseminated information, including assertions made in Commission filings, concerning, among other things, the company's business operations related to its lateral drilling services and the company's anticipated and actual revenues.

On March 15, 2004, the company announced that it was conducting an ongoing internal investigation that began in December 2003 into the company's activities in the second and third quarters of 2003. Verdisys had thus far been unable to determine whether certain radial drilling services were actually provided to two of its customers, Edge Capital Group, Inc., and Energy 2000 NGC, Inc., in the Monroe field in Louisiana. Accordingly, the company expected to restate its interim 2003 financial statements to reverse $230,000 of revenue in the quarter ended June 30, 2003, and $605,000 of revenue in the quarter ended September 30, 2003, until such a time that it could confirm such services were performed.

When shares of Verdisys resumed trading on March 24, 2004, they plummeted $2.10 per share, or 35.9%, on unusually high volume to close at $3.75 per share.

If you bought Verdisys publicly traded securities between August 20, 2003 and March 9, 2004, inclusive, and you wish to serve as lead plaintiff, you must move the Court no later than June 1, 2004. If you are a member of this class, you can join this class action online by clicking here. Any member of the purported class may move the Court to serve as lead plaintiff through Cauley Geller or other counsel of their choice, or may choose to do nothing and remain an absent class member.