According to a press release February 8, 2005, a class action lawsuit was filed on behalf of all securities purchasers of Hypercom Corporation.

Specifically, the complaint charges Hypercom and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Hypercom Corporation manufactures, designs and sells end-to-end electronic payment solutions that include point-of-sale (POS)/point-of-transaction terminals, peripheral devices, transaction networking devices, transaction management systems and application software and provides related support and services. 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 Company's leases originated during the Class Period, by the Company's UK subsidiary, Hypercom EMEA, Inc., were improperly accounted for as "sales-type leases," rather than "operating leases;" (2) that as a result of this, the Company materially overstated its net revenue for the first three quarters of 2004 by at least $4.0 million; (3) that the Company had materially overstated its operating profit by at least 65-75% during the Class Period; (4) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (5) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (6) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.

Further, on or around February 4, 2005, prior to the opening of the market, Hypercom announced a restatement of prior 2004 quarterly financials. More specifically, the Company stated that certain leases originated during that period by the Company's UK subsidiary, Hypercom EMEA, Inc., were incorrectly accounted for as sales-type leases, rather than operating leases. This accounting error, which related to approximately 3,200 leases, resulted in an overstatement of net revenue for the first three quarters of 2004. The Company currently estimated that the adjustment to its financial statements would decrease net revenue for the nine months ended September 30, 2004 by up to $4.0 million as compared to previously announced results, and that operating profit for the same period would decrease by approximately 65 to 75% of the amount of the net revenue reduction. The Company had also determined that the internal control deficiency that gave rise to this restatement represented a material weakness, as defined by the PCAOB's Auditing Standard No. 2. Consequently, management would be unable to conclude that the Company's internal controls over financial reporting were effective as of December 31, 2004, and the Company's independent auditors, Ernst & Young LLP, were expected to issue an adverse opinion with respect to the Company's internal controls over financial reporting.

News of this shocked the market. As a result, shares of Hypercom fell $1.00 per share, or 18.32 percent, to close at $4.46 per share on unusually high trading volume.

If you bought Hypercom Corporation securities between April 30, 2004 and February 03, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.