Brocade Facing Class Action Suit

Brocade Facing Class-Action Suit

By David Utter
Expert Author
Article Date: 2005-05-24

One of the leaders in the storage area network (SAN) industry is restating four years of financials.

As the Department of Justice and the Securities and Exchange Commission watch Brocade restate results in the face of an accounting probe, another problem for the SAN company has arisen.

A class action suit filed by Schiffrin & Barroway, LLP in United States District Court for the Northern District of California says the company violated the Securities Exchange Act of 1934. Two individuals were named in the suit.

Complaints in the suit claim that Brocade improperly accounted for stock-based compensation; did not follow option granting guidelines and lacked internal controls; and yielded a result where the company's financial results were materially inflated.

About the Author:
David Utter is a staff writer for WebProNews covering technology and business. Email him here.