The complaint charges ChoicePoint and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Specifically, the complaint alleges that defendants, during the Class Period, issued a series of material misrepresentations to the market concerning the Company's financial condition thereby artificially inflating the price of ChoicePoint's common stock. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the defendants knew and/or recklessly disregarded the fact that Company's security measures designed to protect consumers from security breaches were inadequate and ineffective; (2) that the Company profited from selling consumer's private information to illegal enterprises; (3) that security breaches by illegal enterprises had occurred on at least 2 occasions, once in 2002 and another time in September 2004; (4) that the Company's actions exposed over 500,000 people to the threat of identity theft; and (5) as a result the foregoing Company's financial results were artificially inflated at all relevant times.

On or around February 18, 2005, The Associated Press published a report entitled "Info Breach Puts Data Firm in Hot Seat." Therein, the report stated that "Personal Information Breach Puts Data Warehouser ChoicePoint in Hot Seat." News of this shocked the market. Shares of ChoicePoint fell $4.20 per share or 9.66 percent, on February 22, 2005, to close at $39.30 per share.

Furthermore, on or around March 3, 2005, The LA Times published an article entitled "ChoicePoint CEO Had Denied Any Previous Breach of Database." The article, in relevant part, read: "The chief executive of information broker ChoicePoint Inc. told interviewers last week that a recent security breach was the only such incident in the company's history, despite the fact that criminals had gained access to its database with similar methods at least once before." Then, on March 4, 2005, before the market opened, ChoicePoint filed a current report with the SEC on Form 8-K. Therein, the Company stated that on September 27, 2004, ChoicePoint found evidence of suspicious activity by a few of our small business customers in the Los Angeles area. ChoicePoint notified law enforcement authorities in Los Angeles, and they commenced an investigation. These customers opened ChoicePoint accounts by using stolen identities and altered documents. In addition, the Company stated that ChoicePoint had received notice from the Securities and Exchange Commission ("SEC") that the SEC was conducting an informal inquiry into the circumstances surrounding any possible recent identity theft, recent trading in ChoicePoint stock by our Chief Executive Officer and Chief Operating Officer and related matters.

As a result of this news, shares of ChoicePoint fell an additional $2.63 per share, or 6.5 percent, to close at $37.65 per share on March 4, 2005.