Sonus Networks, Inc.
- Company Name
- Sonus Networks, Inc.
- Stock Symbol
- Class Period
- January 8, 2015 to March 24, 2015
- Motion Deadline
- January 7, 2019
- District of Massachusetts
The complaint charges Sonus and certain of its officers with violations of the Securities Exchange Act of 1934. Sonus provides communication solutions that allow large and small businesses to secure their communications infrastructures. On October 30, 2017, Sonus announced the completion of a merger with Genband US LLC, with each company becoming a wholly owned subsidiary of a parent company named Sonus Networks, Inc. Sonus then began conducting business as Ribbon Communications, Inc. (“Ribbon”) and changed its ticker symbol from SONS to RBBN.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information about Sonus’s business and prospects, including that the Company would fall materially short of its $74 million revenue forecast, which defendants knew was unrealistic and remained aspirational and largely unreachable, a fact that senior sales personnel regularly communicated to defendants, that a number of 2015 sales had been “pulled forward” to buoy sales numbers in the fourth quarter of 2014 at management’s express direction, and that the “backlog” of sales expected to be recognized in early 2015 was significantly lower than usual. As a result of these false statements and/or omissions, Sonus securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $19 per share.
Then on March 24, 2015, the Company announced disappointing first quarter 2015 financial results, including revenue of only $47-$50 million instead of the $74 million projected, and a loss of $0.29-$0.34 per share instead of a gain of $0.03 per share. On this news, the price of Sonus shares fell $4.46 per share, or 33%, from $13.16 to $8.70 per share.
On August 7, 2018, the SEC announced it had charged Ribbon and certain of its officers with making material misstatements on January 8, 2015 and February 18, 2015 concerning Sonus’s quarterly revenue estimates and guidance for the first quarter of 2015. The Company and officers agreed to pay civil penalties totaling $1.97 million to settle the charges.