A class action has been filed against Terayon Communication Systems, Inc. (TERN), certain of its officers and directors by stockholders who purchased the company's common stock between October 28, 2004 and March 1, 2006. 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.

The complaint alleges that throughout the Class Period, defendants' representations concerning the Company's financial condition, impressive income growth, and various other statements in the Company's quarterly and annual financial results and SEC filings were materially false and misleading because defendants knew or recklessly disregarded that the Company's reported financial results and growth were attributable to improper accounting practices, including improper revenue recognition practices, which resulted in an overstatement of the Company's revenues. Unbeknownst to investors, the Company's internal controls and procedures and, as a result, the Company's projections and reported financial results were seriously flawed. Furthermore, the Company's earnings were not increasing in the amounts that had been represented by defendants, and the Company's reported earnings statements for the interim periods were in violation of Generally Accepted Accounting Principles ("GAAP"). The complaint alleges that on November 7, 2005, after the market closed, Terayon announced that the Company "is reviewing the recognition of revenue for certain transactions during prior periods." More specifically, an internal review was initiated after the Company determined "that certain revenues recognized in the second half of fiscal year 2004 from a customer may have been recorded in incorrect periods." The complaint further alleges that on March 1, 2006, Terayon issued a press release announcing that the Company's "consolidated financial statements for the year ended December 31, 2004 and for the four quarters of 2004 and the first two quarters of 2005 should no longer be relied upon and will be restated." In response to these revelations, the next day, March 2, 2006, Terayon's stock price fell $0.37 per share-a more than 13% decline in the stock's value - on extremely heavy trading volume of more than four million shares.

If you bought Terayon Communication Systems, Inc. securities between October 28, 2004 and March 1, 2006, inclusive, and would like to obtain information about the Terayon Communication Systems, Inc. lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.