Avid Technology, Inc. Sued by Investor
Robbins LLP announces that a purchaser of Avid Technology, Inc. (NASDAQ: AVID) securities has filed a complaint in the U.S. District Court for the District of Massachusetts. The complaint charges the company and certain of its officers and directors with violating the Securities Exchange Act of 1934 between April 22, 2011 and February 22, 2013 (the “Class Period”).
Avid Officials Accused of Making False and Misleading Statements Concerning the Company’s Accounting for Post-Contract Customer Support
The complaint alleges that Avid, a technology company that provides digital media content-creation products and solutions for audio, film, video, and broadcast professionals, and certain of its officers and directors issued a series of materially false and misleading statements to investors regarding the company’s business and operations. Specifically, the complaint alleges that throughout the Class Period, company officials failed to apply the correct accounting principles to the treatment of bug fixes, upgrades, and enhancements provided by Avid to certain of its customers. As a result, Avid failed to account for these software update services as post-contract customer support under U.S. Generally Accepted Accounting Principles, potentially impacting the timing of its revenue recognition.
Avid Stock Price Drops Following Its Postponement of Its Fourth Quarter Earnings Release: Concerned Shareholders Respond with Lawsuit
On February 25, 2013, Avid issued a press release announcing the postponement of its fourth quarter 2012 earnings release in order to evaluate its current and historical accounting treatment related to software updates. In response to this news, Avid shares declined approximately 9%, closing at $6.98 per share on February 25, 2013.
Following the class period, after the market closed on March 21, 2013, Avid announced receipt of a notification letter from NASDAQ warning of possible delisting of the company’s stock from the exchange for continued failure to file its 2012 annual report. Further, the company indicated that it was unable to estimate the significance of the adjustments on prior periods. In response to this news, Avid shares declined an additional 3.81%, to close at $6.56 per share on March 22, 2013.
If you purchased or otherwise acquired Avid stock during the Class Period and wish to serve as lead plaintiff, you must act no later than May 24, 2013.
Avid shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.