VMware, Inc. Class Action Lawsuit
- Company Name
- VMware, Inc.
- Stock Symbol
- Class Period
- March 30, 2019 to February 27, 2020
- Northern District of California
The VMware, Inc. securities class action lawsuit charges VMware and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of VMware securities between March 30, 2019 and February 27, 2020 (the “Class Period”). The VMware securities class action lawsuit was commenced on March 31, 2020 in the Northern District of California and is captioned Lamartina v. VMware, Inc., No. 20-cv-02182.
VMware provides cloud computing and virtualization software and services. These services allow businesses to more efficiently use existing hardware capabilities by allowing network components such as servers to run multiple operating systems or host multiple dedicated applications simultaneously.
The VMware securities class action lawsuit alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose that VMware’s reporting with respect to its backlog of unfilled orders was not in compliance with relevant accounting and disclosure requirements, which would subject VMware to a foreseeable risk of heightened regulatory scrutiny and/or investigation. As a result of this information being withheld from the market, VMware securities traded at artificially inflated prices during the Class Period, with VMware’s stock price reaching a high of more than $200 per share.
Then on February 27, 2020, after the market closed, VMware filed a Form 8-K with the U.S. Securities and Exchange Commission (“SEC”), which disclosed that the SEC was conducting an investigation into VMware’s backlog of unfilled orders. Specifically, VMware disclosed that, “[i]n December 2019, the staff of the Enforcement Division of the [SEC] requested documents and information related to VMware’s backlog and associated accounting and disclosures.” VMware also stated that, although “VMware is fully cooperating with the SEC’s investigation,” it was “unable to predict the outcome of this matter at this time.” On this news, the price of VMware stock fell $15.11 per share, or more than 11%, to close at $120.52 per share on February 28, 2020.
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