NEW YORK, Nov. 19, 2021 /PRNewswire/ -- Today, prominent investor rights law firm Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Southern District of Florida against Citrix Systems, Inc. ("Citrix" or the "Company") and certain of its current and former senior executives (collectively, "Defendants") on behalf of investors in Citrix common stock between January 22, 2020 and October 6, 2021, inclusive (the "Class Period").
BLB&G filed this action on behalf of its client, City of Hollywood Police Officers' Retirement System, and the case is captioned City of Hollywood Police Officers' Retirement System v. Citrix Systems, Inc., No. 21-cv-62380 (S.D. Fla.). The complaint is based on an extensive investigation and a careful evaluation of the merits of this case. A copy of the complaint is available on BLB&G's website by clicking here.
Citrix's Alleged Fraud
Headquartered in Fort Lauderdale, Florida, Citrix is a software company that provides users with secure remote access to computer networks. Historically, Citrix's technology was located "on-premise," installed directly onto computer servers owned and operated by its customers. Customers purchased licenses through a perpetual license model, meaning a purchaser would pay upfront for lifetime access and support, with the cost of the licenses based on the number of users each customer supported. In 2019, Citrix began a two-pronged transition of its business model. First, the Company began to transfer its software platform from the on-premise model to a cloud-based model. In the cloud model, Citrix hosts its software on servers owned and maintained by Citrix, rather than on customers' servers. Second, Citrix transitioned to a subscription-based payment system: instead of paying once per user for a license, Citrix's subscription model required customers to pay a yearly subscription cost.
The complaint alleges that, throughout the Class Period, Defendants repeatedly, falsely assured investors that the transition from on-premise to the cloud product was going smoothly. In addition, in response to the COVID-19 pandemic and the shift to remote work, Citrix created a shorter duration, on-premise subscription license (the "Business Continuity Licenses") that the Company offered at a discounted rate, and which Defendants claimed would transition to cloud accounts after the one-year license expired. As a result of Defendants' misrepresentations, Citrix common stock traded at artificially inflated prices during the Class Period.
The truth about Citrix's difficulties transitioning to the cloud was revealed through a series of disclosures. First, on April 29, 2021, Citrix announced lower than expected license conversions of the Business Continuity Licenses. Specifically, the Company explained that the Business Continuity Licenses did not transition to long-term cloud contracts as expected. Instead, many customers "rolled to another short-term" on-premise license, citing the ongoing COVID-19 pandemic.
Then, on July 29, 2021, the Company announced that the transition to cloud was not as successful as the Company had led investors to believe. Further, Citrix announced a major restructuring of its sales leadership in order to "enhance their focus on" cloud migration. According to the Company, these changes were "significant and may cause short-term disruption before yielding tangible results." Finally, on October 6, 2021, the Company announced that David Henshall had stepped down as President and CEO of Citrix. As a result of these disclosures, Citrix's share price declined precipitously.
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than January 18, 2022, which is the first business day on which the U.S. District Court for the Southern District of Florida is open that is 60 days after the publication date of November 19, 2021. Any member of the proposed Class may seek to serve as Lead Plaintiff through counsel of their choice, or may choose to do nothing and remain a member of the proposed Class.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Scott R. Foglietta of BLB&G at 212.554.1903, or via e-mail at [email protected].
BLB&G is widely recognized worldwide as a leading law firm advising institutional investors on issues related to corporate governance, shareholder rights, and securities litigation. Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity and pioneered the use of the litigation process to achieve precedent-setting governance reforms. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering over $33 billion on behalf of defrauded investors. More information about the firm can be found online at www.blbglaw.com.
Scott R. Foglietta
Bernstein Litowitz Berger & Grossmann LLP
1251 Avenue of the Americas, 44th Floor
New York, New York 10020
SOURCE Bernstein Litowitz Berger & Grossmann LLP