|Court:||United States District Court for the Northern District of California|
|Class Period:||05/21/2020 - 12/02/2020|
|Case Leaders:||John Rizio-Hamilton, Jonathan D. Uslaner|
|Case Team:||Lauren M. Cruz, Caitlin Bozman, Brandon Slotkin|
This is a securities fraud class action on behalf of persons and entities who purchased or otherwise acquired the common stock of Splunk Inc. (“Splunk” or the “Company) from May 21, 2020 through December 2, 2020, inclusive (the “Class Period”), and continued to hold any Splunk common stock after December 2, 2020.
Lead Plaintiff Has Reached a Proposed Settlement of the Action for $30 Million
Lead Plaintiff Louisiana Sheriffs Pension & Relief Fund, on behalf of itself and the Settlement Class, has reached a proposed settlement of the Action for $30,000,000.00 in cash that, if approved, will resolve the Action (the “Settlement”).
If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the Settlement. The Settlement Class consists of:
all persons or entities who purchased or otherwise acquired the common stock of Splunk during the period from May 21, 2020 through December 2, 2020, inclusive, and continued to hold any Splunk common stock after December 2, 2020.
Certain persons and entities are excluded from the Settlement Class by definition (see paragraph 24 of the Notice) or may request exclusion pursuant to the instructions set forth in the Notice (see paragraph 55 of the Notice).
Please read the Notice to fully understand your rights and options. Copies of the Notice and Claim Form can be found in the Case Documents list on the right of this page. You may also visit the case website, www.SplunkSecuritiesLitigation.com, for more information about the Settlement.
To be eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked (if mailed) or submitted on-line by no later than February 15, 2024.
Payments to eligible claimants will be made only if the Court approves the Settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing. Please be patient, as this process will take some time to complete.
IMPORTANT DATES AND DEADLINES
February 15, 2024
Claim Filing Deadline. Claim Forms must be postmarked (if mailed) or submitted on-line no later than February 15, 2024.
January 25, 2024
Exclusion Deadline. To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than January 25, 2024, in accordance with the instructions in the Notice.
January 25, 2024
Objection Deadline. Any objections to the proposed Settlement, the proposed Plan of Allocation, or the motion for attorneys’ fees and expenses, must be postmarked or filed no later than January 25, 2024, in accordance with the instructions in the Notice.
February 22, 2024
Settlement Hearing. The Settlement Hearing will be held February 22, 2024 at 2:00 p.m. Pacific Time, before the Honorable Jon S. Tigar, of the United States District Court for the Northern District of California, either in person Courtroom 6 of the Ronald V. Dellums Federal Building & United States Courthouse, 1301 Clay Street, Oakland, CA 94612, or by videoconference (in the discretion of the Court). The Settlement Hearing will be held by the Court to consider, among other things, whether the proposed Settlement is fair, reasonable, and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for attorneys’ fees and expenses should be approved.
Background and History of the Litigation
Splunk has operated at a net loss every year since its inception and, by the beginning of the Class Period, had negative operating cash flows. Splunk’s CEO, Defendant Merritt, assured investors that the Company would soon turn the corner, reaching positive operational cash flow by 2022 and achieving over a billion dollars in positive operational cash flow by 2023. Splunk told investors that it would accomplish these milestones through continuous investments in marketing and the continuous hiring of additional sales personnel. In each of their quarterly and annual filings with the SEC during the Class Period, Defendants told investors that they were continuously investing in marketing. Defendants also told investors in Splunk’s SEC filings and elsewhere that they were continuously hiring additional sales professionals. They buttressed these statements with additional representations during investor conference calls, assuring the market that—with the exception of a short, two-week hiatus in early March 2020—the Company was continuously hiring.
However, Lead Plaintiff alleges that, unknown to investors at the time, Splunk was not continuing to invest in marketing during the Class Period and it was not continuing to hire new sales personnel. Lead Plaintiff alleges that the end of the Class Period, on December 3, 2020, Defendants stunned investors when they admitted that Splunk, indeed, “suspended investments in marketing” and “froze hiring.” These cutbacks, Defendants acknowledged, caused Splunk to have “a tighter pipeline going into [the third quarter].” As a result, Splunk suffered a hard miss in its third-quarter financial results. Quarterly revenues dropped 11% year-over-year, and net losses ballooned. Defendants also withdrew their guidance to investors that they would eclipse $1 billion in positive operating cash flow by 2023.
Lead Plaintiff alleges that, as a result of Splunk and its executives’ material misrepresentations and omissions, Splunk’s stock price declined 23% in a single trading day.
On March 16, 2021, the Honorable Jon S. Tigar appointed Louisiana Sheriffs’ Pension & Relief Fund as Lead Plaintiff and BLB&G as Lead Counsel for the Action. On June 7, 2021, Lead Plaintiff filed the Consolidated Class Action Complaint, which can be found under the Case Documents header on this page. Defendants moved to dismiss the Complaint on July 27, 2021, and Lead Plaintiff opposed that motion. On March 21, 2022, Judge Tigar largely rejected Defendants’ motion to dismiss and upheld the Complaint.
On May 13, 2022, Defendants filed their answer to the Complaint. Among other things, Defendants’ answer denied Lead Plaintiff’s allegations of wrongdoing and asserted various defenses to the claims pled against Defendants.
Discovery in the Action commenced in April 2022. In the course of discovery, Defendants produced more than 39,000 pages of documents to Lead Plaintiff and substantially completed their production of the documents from the files of the Individual Defendants. The Parties met and conferred and exchanged numerous letters concerning disputed discovery issues over several months, certain of which required the Court’s intervention to resolve.
On July 22, 2022, Lead Plaintiff filed its motion for class certification and appointment of class representative and class counsel, which was accompanied by a report from Lead Plaintiff’s expert on market efficiency and common damages methodologies.
The Parties began exploring the possibility of a settlement in the fall of 2022. The Parties agreed to engage in private mediation and retained Jed D. Melnick, Esq., of JAMS to act as mediator in the Action (the “Mediator”). On December 15, 2022, counsel for the Parties participated in a full-day mediation session before the Mediator. In advance of that session, the Parties exchanged and submitted detailed mediation statements and supporting exhibits to the Mediator.
After a full day of intense negotiations, the Mediator proposed a recommendation that the Parties settle the Action for $30 million, subject to the approval of the Court, which both sides accepted on a double-blind basis.
On January 9, 2023, counsel for the parties informed the Court that they had reached a settlement in principle to resolve the matter. On January 30, 2023, Lead Plaintiff and Defendants executed the Stipulation of Settlement providing for the settlement of the Action for $30 million, subject to the approval of the Court. On February 7, 2023, Lead Plaintiff filed its motion for preliminary approval of the Settlement.
On September 26, 2023, the Court entered an Order (corrected on October 2, 2023) preliminarily approving the Settlement, authorizing notice of the Settlement to be provided to potential Settlement Class Members, and scheduling the Settlement Hearing to consider whether to grant final approval of the Settlement for February 22, 2024.
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