According to a press release dated May 24, 2005, the complaint alleges that during the Class Period, Cray failed to disclose and misrepresented material adverse facts which were known to defendants or recklessly disregarded by them, including: (1) that business metrics having a direct bearing on revenue recognition, including the speed and costs of on- site acceptance testing or improved processes for building machines in accordance with customer requirements, were increasingly unfavorable and unlikely to improve anytime soon (2) manufacturing processes internal controls and testing were flawed and ineffective; (3) Cray's own auditors and Audit Committee knew of the flawed and ineffective internal controls; (4) delays in inventory recognition realization and revenue were a recurring and unpredictable feature of Cray's business model; and (5) Cray was losing money or breaking even on certain customer orders.

The complaint further alleges that on or around May 9, 2005, Cray revealed that it had failed to include an auditor's opinion on management's assessment of internal control over financial reporting. Moreover, Cray continued to report revenue results adversely impacted by faulty internal controls and past quarter practices. In response, Cray's stock price fell $0.74 per share over a three-day period ending May 12, 2005 -- an astonishing 35.6% loss -- to close at $1.34 on 9.5 million shares combined volume.

If you bought Cray, Inc. securities between July 31, 2003 and May 12, 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.