Stockholders v Check Point Software Technologies Ltd.
Check Point Belatedly Admits Declining Sales
A class action has been filed against Internet security and Virtual Private Network solutions provider Check Point Software Technologies Ltd. (Nasdaq: CHKP) and certain of its officers and directors by stockholders who purchased the company's common stock between July 10, 2001, and April 4, 2002. 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.
Throughout this time period, the defendants issued numerous statements concerning Check Point's revenue growth, product and marketing initiatives, and increasing revenues and profits. However, the defendants allegedly failed to disclose that demand for the company's products was materially declining. When this information was belatedly disclosed to the market on April 4, 2002, the price of Check Point shares fell over 24% on extremely heavy trading volume.
