According to a press release dated April 25, 2005, the complaint alleges that BearingPoint and certain of its present and former officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing numerous positive statements throughout the Class Period regarding the Company's financial performance. As alleged in the complaint, these statements were each materially false and misleading when made as they failed to disclose and misrepresented the following material adverse facts which were then known to defendants or recklessly disregarded by them: (1) that the Company had materially overstated its net income and earnings per share and undervalued its identifiable intangibles (goodwill) by approximately $250-400 million; (2) that the Company had inflated its earnings by improperly accounting for restructuring charges relating to acquisitions; (3) that the Company's financial statements were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (4) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (5) that as a result, the value of the Company's net income and financial results were materially overstated at all relevant times.

The complaint further alleges that on or around March 17, 2005, BearingPoint announced that it was delaying the filing of its annual report on Form 10-K. According to BearingPoint, it had experienced significant delays in completing its consolidated financial statements. The delays are due, in part, to: (a) Additional substantive procedures necessary to validate financial information due to control deficiencies; (b) The need to confirm the financial information generated by the Company's new financial accounting system, particularly in the area of revenue recognition; and (c) The Company's simultaneous, ongoing efforts to complete management's assessment of its internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.

Then on April 20, 2005, BearingPoint filed a current report on Form 8-K. Therein, the Company disclosed that it found errors in its financial statements spanning the past two years, that the SEC had begun an investigation into its accounting, and that it had fired nine executives. More specifically, the Company stated: During the fourth quarter of the fiscal year ended December 31, 2004 ("FY04"), BearingPoint determined that a triggering event had occurred, which caused the Company to perform a goodwill impairment test. The triggering event resulted from a combination of various factors, including downgrades in the Company's credit rating in December 2004, significant changes in senior management and underperforming foreign legal entities. As a result of an initial impairment analysis, on March 17, 2005, the Company determined that a material, non-cash charge will be taken duringthe fourth quarter of FY04 as a result of the impairment of its goodwill with respect to the operations in its Europe, the Middle East and Africa ("EMEA") segment. The Company currently estimated that the amount of the impairment charge will be $250 million to $400 million.

BearingPoint also stated that the following previously issued reports should not be relied upon because of errors in those financial statements: (a)Form 10-Q's for each of the first three quarters of FY04; (b) Form 10-K for the six-month transition period ended December 31, 2003; and (c) Form 10-K for the fiscal year ended June 30, 2003.

On news of this, shares of BearingPoint tumbled more than $2.25 per share on unusually high trading volume.

If you bought BearingPoint, Inc. securities between August 14, 2003 and April 20, 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.