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VMware, Inc. Class Action Lawsuit

Case Summary

Company Name
VMware, Inc.
Stock Symbol
VMW
Class Period
March 30, 2019 to February 27, 2020
Court
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.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

Class Period: March 30, 2019 - February 27, 2020
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