Lawsuit alleges Tibco misled investors over Staffware

Lawsuit alleges Tibco misled investors over Staffware

Tibco Software is facing a class action lawsuit alleging that directors deliberately misled investors over the value and progress of its acquisition of business process management firm Staffware between September 2004 and March 2005.

The suit, filed by Milberg Weiss, is pending in California against Tibco and senior executives, including CEO and chairman Vivek Ranadive, CFO Christopher O'Meara, Sydney Carey, chief eccounting officer, and COO Rajesh Mashruwala.

It stems from an unexpected profits warning issued by Tibco back in March following problems with its European operations.

The attorney's allege: "While defendants had previously stated that the Staffware acquisition was substantially completed and that the integration was proceeding according to plan, defendants now revealed that this was not true and that weakness in Europe and delays in closing deals would result in non-GAAP earnings per share well between consensus mean estimates."

During Tibco's 1Q:F05 conference call, Ranadive revealed that Staffware not only remained unintegrated, but because of integration-related problems, European sales had been paralysed.

The following day, the company's stock price declined from a close of $8.90 per share in regular trading to below $7.00.

Millberg Weiss further alleges that uncharasteric trading patterns in the days immediately prior to the profits warning indicate that the negative news may have been leaked to certain investors.

In the last 52 weeks, Tibco's shares have traded at a high of $13.50 in early January and a low of $5.53 in mid-August.

Comments: (0)