NEW YORK, Jan. 29, 2013 /PRNewswire/ -- Attorney Advertising -- Bronstein, Gewirtz & Grossman, LLC announces that a class action suit was filed in the United States District Court for the Eastern District of Virginia on behalf of purchasers of the common stock of VeriSign, Inc. ("VeriSign" or the "Company") (NasdaGS: VRSN) between June 25, 2012 and October 25, 2012, inclusive (the "Class Period").
According to the complaint, on October 25, 2012, after the close of trading, VeriSign shocked the market by disclosing that the DOJ was reviewing its domain name pricing arrangements and that it was now doubtful that review would be complete in time to allow the U.S. Commerce Department to renew its contract before it expired on November 30, 2012. VeriSign also disclosed that the Company's 3Q '12 sales had been negatively impacted by industry efforts to stymie unseemly business practices. As a result, Defendants lowered the Company's FY 2012 revenue outlook by $5 million, now stating revenue would not exceed $875 million. On this news, shares in VeriSign fell over 15%, closing at $39.39 per share on October 26, 2012.
The Complaint alleges that throughout the Class Period the Company and certain of its executive officers issued materially false and misleading statements regarding the Company's business, operations and prospects. Specifically, the Complaint alleges that defendants misrepresented and/or failed to disclose that: (1) challenges to the Company's registry pricing scheme made it more likely the U.S. Department of Justice and Department of Commerce would demand price concessions in exchange for leaving VeriSign in charge of operating the .com and .net networks; (2) the Company's growth in domain name registrations was declining; (3) VeriSign was relying heavily on revenues from "parking" websites and other lower-quality websites focused on drawing in and monetizing traffic, rather than in providing pertinent business leads; (4) defendants knew that Google and other Internet search engines had been improving the quality of their search results by adjusting their algorithms to lower the rankings of subpar-quality websites; (5) subpar domain name owners had stopped renewing their agreements with VeriSign as a result of the Internet search engine's efforts to discourage them by demonetizing their practices; and (6) as a result, defendants knew VeriSign's fiscal year 2012 earnings guidance was not attainable.