Update: This case has settled.
Pomerantz LLP has filed a class action lawsuit against Avid Technology, Inc. (“Avid” or the “Company”)(NASDAQ: AVID) and certain of its officers. The class action filed in United States District Court, District Of Massachusetts, and docketed under 1:13-cv-10686, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Avid between April 22, 2011 and February 22, 2013, both dates inclusive (the “Class Period”). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Avid develops, markets, sells, and supports a variety of software and systems for creating and manipulating digital media content. The Company develops and sells digital editing systems and newsroom computer systems, as well as digital audio systems. Avid’s products are used worldwide in production and post-production film, video, and television facilities.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company incorrectly accounted for its Software Updates by failing to properly treat the Software Updates as post-contract customer support under U.S. Generally Accepted Accounting Principles; (2) the Company lacked adequate internal and financial controls; and (3) as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times. As a result of Defendants' wrongful acts and omissions, and the precipitous decline in the market value of the Company's securities, Plaintiff and other Class members have suffered significant losses and damages.
On February 25, 2013, the Company disclosed that it was postponing the release of its financial results for the fourth quarter of 2012 as it will need additional time “to evaluate its current and historical accounting treatment related to bug fixes, upgrades and enhancements to certain products which the Company has provided to certain customers.” On these revelations, Avid shares declined $0.68 per share or nearly 9%, to close at $6.98 per share on February 25, 2013.
On March 21, 2013, the Company announced that it had received a notification letter from NASDAQ as it was no longer in compliance due to the delay in filing its annual report. On this news, Avid shares declined an additional $0.26 per share or 3.81%, to close at $6.56 per share on March 22, 2013.