Law Offices of Howard G. Smith announces that it is investigating potential claims against FalconStor Software, Inc. (“FalconStor” or the “Company”) (NASDAQ:FALC) concerning possible breaches of fiduciary duty or other violations of law by the Company or its board of directors. FalconStor develops, manufactures and sells network storage software solutions in the United States and internationally.

The investigation concerns the Company’s September 29, 2010, announcement that FalconStor’s President, Chief Executive Officer and Chairman of the Board, ReiJane Huai, resigned from all of his positions with the Company. The Company’s announcement stated that Huai resigned “following his disclosure that certain improper payments were allegedly made in connection with the Company’s contract with one customer,” and that “a special committee of the Board has been formed to conduct a full internal investigation of these matters.” The Company issued press release further stated that it has fully cooperated with law enforcement authorities with respect to the separate “ongoing investigation.”

If you purchased shares of FalconStor and still hold those shares, if you have information or would like to learn more about these claims, or if you wish to discuss these matters or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, Toll Free at (888) 638-4847, or by email to howardsmith@howardsmithlaw.com, or visit our website at http://www.howardsmithlaw.com.

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