Labaton Keller Sucharow serves as Lead Counsel in a securities class action against Extreme Networks, Inc. (Extreme or the Company) and several of its senior executives (collectively, Defendants) alleging violations of Sections 10(b) and 20(a) of the Exchange Act of 1934, 15 U.S.C. §§ 78j(b), 78t(a), and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, 17 C.F.R. § 240.10b-5. Defendants are accused of engaging in a two-pronged fraud that deceived investors about both the source and sustainability of Extreme's revenue growth during the period from July 27, 2022, through January 30, 2024 (the Class Period).
The case alleges that Defendants publicly attributed record revenues during the Class Period to "exceptionally strong," "robust," and "unabated" organic demand for the Company's networking equipment, while secretly coercing distributors and partners into purchasing hundreds of millions of dollars of unwanted inventory by leveraging those distributors' access to in-demand products, and accelerating revenues from partners by "pulling in" sales from future quarters.
Furthermore, Defendants allegedly assured investors that Extreme's backlog—which peaked at $555 million—comprised "firm," "not cancelable" orders reflecting genuine end-user demand and negligible cancellations (less than one percent), while internally knowing that the backlog was contractually designed to be cancelled and was riddled with duplicate and triplicate orders carrying estimated cancellation rates ranging from 10% to as high as 66%.
Together, these alleged deceptions drove Extreme's stock to a Class Period high of $32 per share. When the truth was revealed through a series of partial corrective disclosures beginning in January 2023 and continuing through January 2024—including Extreme’s CFO's resignation, dramatic declines in the reported backlog, Extreme's decision to stop reporting its backlog, downward revenue guidance, and disclosure of "channel digestion" issues—Extreme's stock price collapsed over 60%, falling to $12.59 per share, destroying over $2 billion in shareholder value.
This case is assigned to the Honorable Trina L. Thompson in the U.S. District Court for the Northern District of California. On September 9, 2025, Lead Plaintiffs filed a Second Amended Consolidated Complaint for Violations of the Federal Securities Laws (Second Amended Complaint). Defendants moved to dismiss the Second Amended Complaint under Federal Rules of Civil Procedure 12(b)(6).
On March 23, 2026, Judge Thompson issued an order denying in full Defendants’ motion to dismiss. The case is in active discovery. Trial is currently scheduled to commence in June 2027.
The case is Steamfitters Local 449 Pension & Retirement Security Funds v. Extreme Networks, Inc. et al., No. 3:24-cv-05102 (N.D.C.A.). Labaton Keller Sucharow represents Lead Plaintiffs the Oklahoma Firefighters Pension and Retirement System, Oklahoma Police Pension and Retirement System, Oakland County Voluntary Employees' Beneficiary Association, and Oakland County Employees' Retirement System.
