SAN FRANCISCO, Feb. 1 /PRNewswire/ -- Gold Bennett Cera & Sidener LLP
announced today that it had filed a class action in the United States District
Court for the Northern District of California on behalf of purchasers of
Legato Systems, Inc. ("Legato") (Nasdaq: LGTO) common stock during the period
between October 21, 1999 and January 19, 2000 (the "Class Period"), Case
Number C-00-0365-CRB. Plaintiff seeks to recover damages on behalf of all
purchasers of Legato common stock during the Class Period (the "Class").
The plaintiff, who suffered losses of approximately a million dollars, is
represented by the San Francisco law firm of Gold Bennett Cera & Sidener LLP.
For over 30 years, Gold Bennett Cera & Sidener LLP and its predecessors have
successfully engaged in complex commercial litigation, including shareholder,
consumer and antitrust class actions, in federal and state courts throughout
the United States, recovering hundreds of millions of dollars for its clients.
The complaint charges Legato and certain of its officers and directors
(Louis C. Cole, Kent D. Smith, Stephen C. Wise, Nora M. Denzel,
Phillip E. White) with violations of the Securities Exchange Act of 1934 by
making material misrepresentations in Legato's financial statements and other
false statements regarding its earnings growth. During the Class Period,
certain of the individual defendants who controlled and were senior officers
of Legato are alleged to have engaged in the scheme to conceal Legato's
flagging growth to prevent the decline in the price of Legato stock in order
to: (i) use Legato's artificially inflated stock as "currency" to fund the
Company's acquisition of companies in stock-for-stock transactions; and
(ii) receive $12.1 million in insider trading proceeds.
The Complaint alleges that, during the Class Period, Legato portrayed
itself as a highly successful company with a leading position in the
fast-growing enterprise storage and recovery software market. Because Legato
consistently reported revenues and earnings which exceeded Wall Street
estimates, its stock price rose dramatically, commensurate with the optimistic
expectations created by defendants' bullish statements to analysts concerning
Legato's prospects for continued high growth.
On January 19, 2000, however, Legato shocked the market by announcing that
it would restate its 1999 third quarter financial results. Specifically, its
auditors took issue with Legato's attempts to accelerate the recognition of
licensing revenues on certain long-term contracts, forcing the Company instead
to book the revenues over a period of several quarters, as required by
Generally Accepted Accounting Principles. As a result of the changes to its
revenue recognition practices, Legato was forced to restate its third quarter
results and to revise downward its sales growth for 2000. The following day,
the price of Legato stock collapsed, dropping to $29.75 per share, a one-day
decline of more than 44.5%.
If you are a member of the Class described above, you may, no later than
March 20, 2000, move the Court to serve as lead plaintiff of the Class, if you
so choose. In order to serve as lead plaintiff, however, you must meet certain
legal requirements. If you wish to discuss this action or have any questions
concerning this case or your rights or interests, please contact
Joseph M. Barton, Esq. of Gold Bennett Cera & Sidener LLP, 595 Market Street,
Suite 2300, San Francisco, California 94105, by telephone at 800-778-1822 or
415-777-2230, by facsimile at 415-777-5189 or by e-mail at firstname.lastname@example.org.
SOURCE Gold Bennett Cera & Sidener LLP