Pomerantz Law Firm Announces the Filing of a Class Action against Forescout Technologies Inc. and Certain Officers - FSCT
NEW YORK, July 29, 2020 /PRNewswire/ -- Pursuant to the United States District Court for the Northern District of California's Order consolidating certain pending cases on July 22, 2020, Pomerantz LLP announces that a class action lawsuit has been filed against Forescout Technologies Inc. ("Forescout" or the "Company") (NASDAQ: FSCT) and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and indexed under 20-cv-00076, is on behalf of all investors who purchased or otherwise acquired Forescout common stock between February 7, 2019, and May 15, 2020, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Forescout common stock during the Class Period, you have until September 28, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Amended Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
Forescout is a cybersecurity company, based in San Jose, California, that purports to assist businesses and government agencies in monitoring devices that seek to connect to their networks in an effort to prevent a cyber-attack, limit access and control to the networks or otherwise mitigate the risks of a security breach.
The Amended Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's sales pipeline and the productivity of its sales force and repeatedly issued a false or misleading revenue guidance. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) dramatic cuts to the number of employees began in early 2019 throughout the Company, particularly within the sales department; (ii) a significant number of sales employees left the Company due to declining sales throughout 2019; and (iii) the productivity of the Company's sales representatives seriously declined throughout 2019.
While Defendants repeatedly characterized large deals in the pipeline as committed, the Amended Complaint alleges that Defendants failed to disclose that (a) potential deals worth millions of dollars were included in quarterly forecasts even though the Defendants knew or recklessly disregarded that those deals would not close before the end of the quarter, and (b) artificial closing dates for potential deals were listed in the Salesforce platform in an attempt to support the Company's misleading forecasts. In addition, the Defendants issued a false revenue guidance on February 7, 2019, May 9, 2019, August 7, 2019, November 6, 2019 and March 23, 2020.
On May 9, 2019, Forescout announced that revenues for the second quarter of 2019 would be lower due to "slipped deals." On this news, Forescout's share price declined by $7.02 or over 16% from its previous day closing price of $43.30 per share, to close at $36.28 per share on May 10, 2019. On October 10, 2019, Forescout announced that total revenue for the third quarter was expected to be within the range of $90.6 million to $91.6 million compared to the Company's prior guidance of $98.8 million to $101.8 million. On this news, Forescout's share price declined from its previous day closing price of $39.20 to close at $24.565 per share on October 10, 2019.
On May 11, 2020, Defendants falsely blamed the global pandemic for again missing a revenue guidance for the first quarter of 2020. On this news, Forescout's common stock fell from its closing price of $32.09 on the previous day, to close at $30.50 per share on May 12, 2020.
No later than October 2019, the Company began to explore strategic options, including a possible sale. On February 6, 2020, Defendants blunted the impact of poor financial results for the fourth quarter of 2019 by announcing that the Company had entered into a definitive agreement to be acquired by the affiliates of Advent International ("Advent") for $33 per share in an all cash transaction valued at approximately $1.9 billion. On May 15, 2020, Advent notified Forescout that it would not proceed with the acquisition as scheduled, in part, because the Company had already suffered from a dramatic decline in earnings potential and financial performance from Q1 2019 to Q1 2020 that was known to get worse in the future. On May 18, 2020, Forescout announced that Advent notified the Company that it would not proceed with the acquisition as scheduled. On this news, the price of Forescout's common stock declined from its closing price of $29.52 on the previous trading day to close at $22.57 on May 18, 2020. The price of Forescout common stock declined again to close at $20.93 on May 19, 2020 and $19.84 on May 20, 2020.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
SOURCE Pomerantz LLP
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