Court activity of interest to the legal technology community:

CALIFORNIA

Silicon Valley flash memory company Violin Memory’s performance as a public company has been largely one-note—lackluster—and it now faces a spate of securities class actions alleging that the company misled investors about its prospects. In a suit filed Tuesday in the Northern District of California on behalf of investors in the IPO, plaintiffs lawyers from Kaplan Fox & Kilsheimer allege that Violin’s public registration statement omitted key information about its revenue streams and exaggerated progress it was making to expand the business. It names Violin, its officers and directors, and the banks that underwrote the offering as defendants. And it’s only the most recent securities suit lodged against the beleaguered company, which on Monday fired its CEO, Donald Basile.

The company had a fitful IPO process, delaying it multiple times before making its public debut in September. It priced 18 million shares at $9 apiece—a smaller offering than it had initially sought—and the stock started south almost immediately. It’s now down more than 70 percent. According to the complaint, Violin’s filing played down the fact it was still struggling to develop flash memory solutions that would be both compliant with Toshiba, its sole supplier and largest shareholder, and optimized for customers.

The suit also contends that Violin failed to disclose that sales figures had been strained by federal budget cuts “which caused the company to lose material federal projects, or caused revenue from such projects to be indefinitely deferred.” — Chelsea Allison, The Recorder. Full story here.

CONNECTICUT

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