Felix v. Symantec Corporation et al.

Court: United States District Court for the Northern District of California
Case Number: 3:18-cv-02902-WHA
Judge: Hon. William Alsup
Class Period: 05/11/2017 - 08/02/2018
Case Contacts: Jeroen van Kwawegen, Jeremy P. Robinson, Rebecca E. Boon

This is a securities fraud class action filed on behalf of all purchasers of Symantec Corporation (“Symantec” or the “Company”) common stock between May 19, 2017 and May 10, 2018, inclusive (the “Class Period”), alleging claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against Symantec, the world’s largest provider of cyber security software and services, its Chief Executive Officer, and its Chief Financial Officer.

Commenced on May 17, 2018, the case arises from an alleged accounting fraud that manipulated Symantec’s reported financial results to trigger compensation awards for its top executives.  Specifically, during the Class Period, Symantec represented that it had accurately reported the Company’s non-GAAP financial measures, that it maintained effective internal controls over financial reporting, and that its executive compensation program aligned the interests of management and shareholders.  In truth, the Company misrepresented its non-GAAP financial measures to meet financial targets used to determine compensation for the Company’s most senior officers. 

On May 10, 2018, the truth emerged when Symantec announced that the Audit Committee of the Board of Directors had commenced an internal investigation into the Company’s accounting practices due to concerns raised by a whistleblower, that the Company had contacted the Securities and Exchange Commission regarding the matter, and that in light of the pending internal investigation Symantec would not be timely filing its annual report.  On this news, Symantec’s stock price plummeted from $29.18 per share on May 10, 2018 to $19.52 per share on May 11, 2018, over 33%, erasing roughly $6 billion of market capitalization.

On August 23, 2018, the court appointed SEB Investment Management AB (“SEB IM”) as Lead Plaintiff and subsequently approved SEB IM’s selection of BLB&G to serve as Lead Counsel for the Class.

On December 26, 2018, Defendants moved to dismiss to the Complaint. After full briefing, the Court heard argument at a hearing in San Francisco on January 31, 2019. On June 14, 2019, the Court dismissed the Complaint, granting Lead Plaintiff leave to file a motion to amend. Lead Plaintiff filed its Motion for Leave to File a First Amended Complaint on July 11, 2019. On July 16, 2019, after Lead Plaintiff filed its Motion, the Court unsealed certain relevant documents in a related derivative action. On July 23, 2019, Lead Plaintiff filed an Amended Motion for Leave to File a First Amended Complaint to include relevant information from said documents and other additional relevant facts uncovered in connection with Lead Plaintiff’s further investigation. The Court held a hearing on September 26 and granted Lead Plaintiff’s motion on October 2, 2019, sustaining Plaintiffs’ claims against Symantec and its former CEO and ordering Defendants to answer those claims. Lead Plaintiff filed its First Amended Complaint on October 11, 2019 to conform the pleading to the Court’s October 2 opinion. Defendants’ answer is due on November 7, 2019. Defendants filed their Answers to the First Amended Complaint on November 7, 2019. The case is now in discovery. Additionally, Plaintiff filed its motion for class certification on January 17, 2020. Defendants’ opposition is due on February 14, 2020 and Plaintiff’s reply was due on March 13, 2020. 

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