Cauley Geller Announces Class Action Lawsuit Against Network Engines, Inc. On
Behalf of Investors
NEW YORK, Dec. 16 /PRNewswire-FirstCall/ -- The Law Firm of Cauley Geller
Bowman & Rudman, LLP announced today that a class action lawsuit has been filed
in the United States District Court for the District of Massachusetts on behalf
of purchasers of Network Engines, Inc. ("Network Engines" or the "Company")
publicly traded securities during the period between November 6, 2003 and
December 10, 2003, inclusive (the "Class Period"). A copy of the complaint
filed in this action is available from the Court, or can be viewed on the firm's
website at http://www.cauleygeller.com/show_case.asp?ccode=209&pcode=10&pp=4 .
The complaint alleges that by the start of the Class Period, defendants knew,
but failed to disclose, that Network Engines was in the process of renegotiating
its distribution contract with EMC, and that EMC was demanding price reductions,
which, if agreed to, would negatively impact the Company's future financial
results. Nevertheless, throughout the Class Period, defendants issued positive
statements highlighting the Company's strong financial performance, continued
growth and the success of its relationship with EMC, its largest customer.
Defendants failed to disclose, however: (i) that the Company was in the process
of renegotiating its distribution contract with EMC; (ii) that EMC was demanding
price concessions to bring its agreement with Network Engines in line with the
pricing that Network Engines was providing to other customers; (iii) that the
new distribution contract with EMC would negatively impact the Company's future
financial performance; (iv) that the Company would not be able to sustain the
growth in its gross margins as a result of the amended contract; and (v) as a
result, the Company's positive statements issued during the Class Period were
materially false and misleading when made.
Finally, on December 10, 2003, the Company announced, among other things, that
it had renegotiated its distribution contract with EMC and the amended contract
would negatively impact the Company's gross profit related to the sale of
EMC-approved Host Bus Adapters and the Company's distribution operations gross
profit.
Following this announcement, shares of Network Engines common stock fell $3.92
per share, or 39%, to close at $6.10 per share, on extraordinarily high trading
volume, and have continued to decline since that time.
If you bought Network Engines publicly traded securities between November 6,
2003 and December 10, 2003, inclusive, and you wish to serve as lead plaintiff,
you must move the Court no later than February 17, 2004. If you are a member of
this class, you can join this class action online at
http://www.cauleygeller.com/template8.asp?pcode=6&pp=1 . Any member of the
purported class may move the Court to serve as lead plaintiff through Cauley
Geller or other counsel of their choice, or may choose to do nothing and remain
an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in
class action and corporate governance litigation. It is one of the country's
premiere firms in the area of securities fraud, with in-house finance and
forensic accounting specialists and extensive trial experience. Since its
founding, Cauley Geller has recovered in excess of two billion dollars on behalf
of aggrieved shareholders. The firm maintains offices in Boca Raton, Little
Rock and New York.
If you have any questions about how you may be able to recover for your losses,
or if you would like to consider serving as one of the lead plaintiffs in this
lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's
website at http://www.cauleygeller.com/ .
Contact: CAULEY GELLER BOWMAN & RUDMAN, LLP Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq.
Client Relations Department:
Jackie Addison, Heather Gann or Chandra West
P.O. Box 25438
Little Rock, AR 72221-5438
Toll Free: 1-888-551-9944
Fax: 1-501-312-8505
E-mail: DATASOURCE: Cauley Geller Bowman & Rudman, LLP CONTACT: Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq., both of Cauley Geller Bowman & Rudman, LLP, +1-631-367-7100 Web site: http://www.cauleygeller.com/ http://www.cauleygeller.com/show_case.asp?ccode=209&pcode=10&pp=4 http://www.cauleygeller.com/template8.asp?pcode=6&pp=1
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