A class action has been filed against Viisage Technology, Inc. (NasdaqNM:VISG), certain of its officers and directors by stockholders who purchased the company's common stock between October 25, 2004 and March 02, 2005. 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.

Viisage Technology, Inc. delivers technology identity solutions for governments, law enforcement agencies and businesses concerned with enhancing security, reducing identity theft, providing access control and protecting personal privacy.

According to a press release dated March 8, 2005, the Complaint alleges Viisage was forced to borrow funds from its controlling shareholder, and was in dire need of a credit line adequate to finance its ongoing business needs. In order to secure such credit, the defendants engaged in a scheme to artificially engineer a profit in the third quarter of 2004 (ending Sept. 26, 2004), and made earnings projections known by them to be baseless and unsupportable. The third quarter profit, which was reported on October 25, 2004, was only made possible through various accounting manipulations, whereby certain assets were prematurely recognized, while certain expenses were artificially deferred from the third quarter of 2004 into the fourth quarter of 2004.

The complaint further alleges that after obtaining the desired credit line, the defendants waited until February 27, 2005 to shock investors with the news of numerous fourth quarter charges and a significant asset impairment, all of which returned Viisage to substantial unprofitability. This news caused Viisage stock to drop over 20% on heavy trading. Then, on or around March 2, 2005, defendants again shocked the market by announcing a "material weakness" in its internal financial controls, and that "management will be unable to conclude that the Company's internal controls over financial reporting are effective as of December 31, 2004. Therefore, BDO Seidman LLP, the Company's external accounting firm, will issue an adverse opinion with respect to the effectiveness of the Company's internal controls over financial reporting." As a result of this news, the stock dropped another 20%, closing on March 3, 2005 at $4.50 per share, down from almost $7 per share at the commencement of the Class Period.

If you bought Viisage Technology, Inc. securities between October 25, 2004 and March 02, 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.