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Rigrodsky & Long, P.A.
Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Northern District of California on behalf of all persons or entities that purchased the common stock of VeriFone Systems, Inc. (“VeriFone” or the “Company”) (NYSE: PAY) between December 14, 2011 and February 20, 2013, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
If you purchased shares of VeriFone during the Class Period, or purchased shares prior to the Class Period and still hold VeriFone, and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to email@example.com, or at: http://www.rigrodskylong.com/investigations/verifone-systems-inc-pay.
VeriFone is a leading global provider of payment solutions that enable secure electronic payment transactions and value-added services at the POS (point of sale). The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that: (i) the Company was encountering serious problems in transitioning to an increasingly subscriptions-based service model; (ii) VeriFone used past acquisitions to mask its declining revenue base; (iii) the Company inappropriately recognized revenues from distributors during periods where such revenues should have been deferred; (iv) the Company lacked adequate internal and financial controls; and (v) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times. As a result of defendants’ false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period. While issuing these materially misleading statements, the Individual Defendants and other Company insiders disposed of over $11 million worth of VeriFone stock.
According to the Complaint, on April 30, 2012, Deutsche Bank issued a detailed research report asserting for the first time that VeriFone was inflating its organic growth through acquisitions by treating as “organic growth” VeriFone sales to legacy customers of a company known as Hypercom Corp. (“Hypercom”) and possibly to customers of other acquired companies. In reality, such sales simply cannibalized millions of dollars in Hypercom product sales and did not constitute organic growth.
Then, on February 20, 2013, the Company announced its preliminary financial results for the first fiscal quarter ended January 31, 2013. VeriFone reported that it expected first quarter non-GAAP net income to be between $0.47 and $0.50 per share and GAAP net income to be between $0.07 and $0.10 per share on revenue of $424 million, falling well below analysts’ profit forecast of $0.73 per share of revenue of $492 million. Analysts immediately began to doubt VeriFone’s explanation of weak macro-economic conditions in Europe and an increase in deferred revenue related to volume shipments to customers in the Middle East and Africa that did not meet first quarter revenue recognition requirement. On this news, shares in VeriFone dropped nearly 43%, closing at $13.65 per share on February 21, 2013, from a close of $31.89 per share on February 20, 2013, on volume of over 50 million shares.
If you wish to serve as lead plaintiff, you must move the Court no later than May 6, 2013. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed 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.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
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