Settled: May 14, 2018
A $12.5 million settlement was reached in this securities class action litigation against CommVault Systems, Inc. (CommVault) and certain individual defendants. CommVault is an independent provider of data and information management software and, prior to the second half of 2012, relied on its relationship with Dell, Inc. for much of its revenue.
The lead plaintiffs filed a second amended complaint, alleging that CommVault engaged in an improper form of earnings management commonly referred to in accounting literature as “cookie jar” accounting. Specifically, the second amended complaint alleges that the defendants delayed the recognition of software revenue in order to hide the truth that growth was decelerating after Dell, Inc. announced that it had acquired certain competitors of, and would thus be competing against, CommVault.
On September 30, 2016, the court denied the defendants' motion to dismiss. On May 14, 2018, the court approved the $12.5 million settlement. Information about the Settlement is available at www.commvaultsecuritieslitigation.com.
The case is In re CommVault Systems, Inc. Securities Litigation, No. 14-cv-05628 (D. N.J.). The lead plaintiff is Arkansas Teacher Retirement System. The defendants are CommVault Systems, Inc., N. Robert Hammer, and Brian Carolan. Labaton Sucharow serves as additional counsel.