- Company Name
- Quantum Corporation
- Stock Symbol
- Class Period
- May 10, 2016 to February 7, 2018
- Motion Deadline
- April 14, 2018
- Northern District of California
The complaint charges Quantum and certain of its officers with violations of the Securities Exchange Act of 1934. Quantum sells scale-out tiered storage, archive and data protection solutions for capturing, sharing, managing and preserving digital assets in physical and virtual environments. Quantum’s products include storage file systems, nearline storage systems, back-up and de-duplication appliances, tape libraries and cloud services.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Quantum’s business and financial results, including that Quantum had inappropriately accounted for revenue relating to certain transactions commencing April 1, 2016 due to the Company’s lack of adequate internal controls over financial reporting, and that as a consequence, Quantum was subject to increased regulatory scrutiny and potential fines. As a result of these false statements and/or omissions, Quantum securities traded at artificially inflated prices during the Class Period, with its stock price reaching close to $9 per share.
Then on February 8, 2018, Quantum announced it was postponing the release of its fiscal third quarter 2018 results so that its “audit committee . . . can complete an investigation into accounting matters and related internal controls that were raised in response to a recent inquiry by the [SEC].” The Company disclosed that it had received a subpoena from the SEC on January 11, 2018 “regarding its accounting practices and internal controls related to revenue recognition for transactions commencing April 1, 2016,” and that, as a result, the Company had “decided it was prudent to postpone its quarterly results release and conference call, pending conclusion of the investigation.” On this news, the price of Quantum stock fell $1.67 per share, or nearly 30%, to close at $3.90 per share on February 8, 2018.