Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) ( http://www.rgrdlaw.com/cases/falconstor/) today announced that a class action has been commenced in the United States District Court for the Eastern District of New York on behalf of purchasers of FalconStor Software, Inc. (“FalconStor”) (NASDAQ:FALC) common stock during the period between February 5, 2009 and September 29, 2010 (the “Class Period”). If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 631/367-7100, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/falconstor/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges FalconStor and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company develops, manufactures and sells network storage software solutions in the United States and internationally. It also provides related maintenance, implementation, and engineering services. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and its prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (i) that the Company was experiencing weak demand for its products and services; (ii) that the Company was making improper payments to secure a contract with at least one of the Company’s customers; and (iii) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
Then, on September 29, 2010, FalconStor announced that ReiJane Huai “resigned from all of his positions with the Company, effective immediately.” The press release stated that Mr. Huai “tendered his resignation following his disclosure that certain improper payments were allegedly made in connection with the Company’s contract with one customer.” In reaction to Mr. Huai’s resignation and the revelation of improper payments to a certain customer, shares of the Company’s stock fell $0.91 per share, or 22%, to close at $3.15 per share, on unusually heavy trading volume.Plaintiff seeks to recover damages on behalf of all purchasers of FalconStor common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site ( http://www.rgrdlaw.com) has more information about the firm.