Pegasystems, Inc. (PEGA) found guilty of stealing its competitor’s trade secrets
A shareholder filed a class action on behalf of all persons and entities that purchased Pegasystems, Inc. (NASDAQ: PEGA) common stock between May 29, 2020 and May 9, 2022, for violations of the Securities Exchange Act of 1934. Pegasystems develops customer relationship management (“CRM”) software.
According to the complaint, Pegasystems’ products and the revenue generated from those products were, in large part, the result of theft of trade secrets from one of its competitors. On May 29, 2020, Appian Corporation sued Pegasystems for stealing its trade secrets and violating Virginia’s computer crime law.
Pegasystems, in violation of SEC reporting requirements, for two years did not publicly disclose Appian’s lawsuit in its public SEC filings. On May 9, 2022, Pegasystems disclosed that the Virginia circuit court jury awarded Appian more than $2 billion for Pegasystem’s trade secret misappropriation, which is estimated to be the largest damages award in Virginia circuit court history. On this news, Pegasystems’ stock price fell 21% and lost over $1 billion in market capitalization, closing at $52.25 on May 10, 2022. Securities analysts voiced their concerns of the news, lowing their ratings and noting that the lawsuit, misconduct, and jury verdict would negatively impact the Company’s ability to obtain future business, including contracts with governmental authorities.
Next Steps: If you acquired shares of Pegasystems, Inc. (PEGA) common stock between May 29, 2020 and May 9, 2022, you have until July 18, 2022, to ask the court to appoint you lead plaintiff for the class. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.