Stockholders v Siebel Systems, Inc.
Siebel Systems Accused of Fudging Customer Satisfaction Surveys to Boost Investor Confidence
Several class actions have been filed against software designer Siebel Systems, Inc. (Nasdaq:SEBL) and certain of its officers and directors by stockholders who purchased the company's common stock between October 1, 2001, and July 17, 2002. The actions claim 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 action alleges that Siebel Systems executives misrepresented the company's future business prospects by overstating customer acceptance of its new product offerings --including Siebel 7 CRM, its premiere customer relations management package-- and failed to disclose that "independent" customer satisfaction surveys that were used to persuade investors that a vast majority of the company's customers would become return software purchasers were in fact carried out by an affiliated company and could not be relied upon.
On July 17, 2002, Siebel announced its second quarter June 30, 2002, earnings reporting a precipitous drop in revenues of more than 15% and a 33% shortfall in earnings compared to consensus analyst forecasts. The company also confirmed the continuing slide in demand for its products by slashing revenue forecasts for the remainder of 2002 by an additional 25% - or $600 million below guidance provided by the defendants just six months prior. In unusually heavy volume of 65 million shares traded, Siebel Systems share prices dropped $2.13 on July 18 to close at $9.61.
If you purchased the securities issued by Siebel Systems, Inc., during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by May 10, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.
