NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/saic/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of SAIC, Inc. (“SAIC”) (NYSE:SAI) common stock during the period between April 11, 2007 and September 1, 2011 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/saic/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges SAIC and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Company focuses its business on providing defense, intelligence, homeland security, logistics, energy, environment, and heath solutions and services to federal, state and local government agencies, foreign governments and customers in select commercial markets.
The complaint alleges that during the Class Period defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (a) that SAIC had overbilled New York City hundreds of millions of dollars on the CityTime Project, a project associated with the modernization of New York City’s employee payroll system, over a multi-year period; (b) that, as a result of SAIC’s known, but undisclosed, overbilling practices, its operating results during the Class Period were materially misstated; (c) that SAIC’s overbilling practices subjected the Company to numerous undisclosed risks, including monetary risks and reputational risks, particularly because government agencies are SAIC’s primary customers and any harm to its reputation and/or relationships with such agencies would adversely affect its future revenues and growth prospects; (d) that, as a result of the foregoing circumstances, SAIC violated applicable accounting standards associated with the recognition of revenue and the disclosure and accounting for loss contingencies; (e) that the Company’s financial statements were not fairly presented in conformity with generally accepted accounting principles and were materially false and misleading; (f) that certifications issued by defendants Kenneth C. Dahlberg and Mark W. Sopp associated with the Company’s internal and disclosure controls were materially false and misleading; and (g) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its business and prospects.
On August 31, 2011, SAIC issued a press release announcing its financial results for its 2012 second quarter, the period ended July 31, 2011. For the quarter, SAIC reported an approximate 6% decline in revenue and a 23% decline in operating margin.
Following the Company’s 2012 fiscal second quarter earnings announcement, defendants held a conference call with analysts and investors wherein defendants disclosed that the Company’s revenues were, in part, adversely impacted by the “wind[ing] down” of the CityTime contract and that, while the Company could not quantify the amount, it believed that it was “probable” that SAIC would have to make restitution to New York City for wrongful conduct on CityTime.
The revelation that SAIC would incur a probable loss on CityTime was significant because, pursuant to applicable accounting rules, it served as an acknowledgement that, once the Company could reasonably estimate the amount, SAIC would incur a charge against its earnings for the wrongful conduct alleged herein on CityTime.
In response to this revelation, shares of SAIC common stock plummeted nearly 14%, from $15.00 per share on August 31, 2011 to $12.97 on September 1, 2012, as the artificial inflation came out of the Company’s stock price.
Plaintiff seeks to recover damages on behalf of all purchasers of SAIC common stock during the Class Period (the “Class”). Plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.