Wolf Popper LLP, attorneys for plaintiff Middlesex Retirement System, report that the United States District Court for the Central District of California has substantially denied defendants’ motions to dismiss plaintiff’s class action complaint charging Quest Software Inc. (NasdaqGS: QSFT) and certain of its officers and directors with securities fraud in the intentional backdating of stock options. In the action entitled Middlesex Retirement System v. Quest Software, Inc., et al., 06-cv-06863-DOC-RNB (C.D. Cal.), the Court previously substantially denied defendants’ initial efforts to dismiss the action in October 2007, and has recently rejected defendants’ latest efforts to dismiss claims under §§10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Securities Exchange Act of 1934. The Court found that the facts alleged in the complaint strongly infer that defendants knew or were deliberately reckless in not knowing that Quest’s SEC filings were false and misleading. The Court noted that it was “highly implausible that Defendants were not aware that their prolonged practice of backdating stock options would have a material and misleading effect on their public financial statements.” The Court’s opinion stated that “Defendants knew that they were backdating stock options and were certainly aware of the large profits they were reaping from those options.” In dismissing defendants’ arguments as “convenient,” the Court stated that there were “red flags” and “warnings” which gave rise to the inference that defendants “either knew or were deliberately reckless in not knowing that their backdating and accounting procedures rendered Quest’s financial statements misstated” and that “[a]t the very least, Defendants’ actions show deliberate recklessness.” The Court ordered discovery in the litigation to begin “posthaste.”