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Cases & Investigations
Quest Software, Inc. Securities Litigation

Overview
Overview Case Updates

Type: Notable Cases

Case Number: 06-CV-06863

Class Period: 11/09/2001

Class Period End Date: 07/03/2006

Stock Symbol: NASDAQ: QSFT

Court: United States District Court for the Central District of California

Settlement Amount: $29,400,000

In Middlesex Retirement System v. Quest Software, Inc., No. 06-06863-DOC (RNBx) (C.D. Cal.), Wolf Popper was appointed lead counsel in a federal securities class action against Quest Software, Inc. (“Quest”), a company that designs, develops, distributes and supports software products.  The case is based on allegations that Quest issued materially false and misleading statements to cover up its failure to account properly for backdated stock options, causing Quest’s operating and net income to be overstated and its stock price to be artificially inflated.  Following comprehensive briefing opposing defendants’ initial motion to dismiss, the Court denied virtually all of defendants’ motion.  Defendants filed subsequent motions to dismiss challenging the amended complaint which had added additional allegations.  The Court denied defendants’ motions to dismiss the claims under § 10(b) and § 20(a) of the Securities Exchange Act of 1934.  See Middlesex Retirement System v. Quest Software, Inc., 527 F. Supp. 2d 1164 (C.D. Cal. 2007); and Amended Order (C.D. Cal. July 10, 2008).  After comprehensive discovery and the grant of plaintiff’s motion to compel discovery and plaintiff’s motion for class certification, see Middlesex Retirement System v. Quest Software, Inc., Order, CV 06-6863-DOC (RNBx) (C.D. Cal. Jul. 8, 2009), aff’d, Order (C.D. Cal. Sept. 18, 2009) (order granting Plaintiff’s motion to compel); and Order, CV 06-6863-DOC (RNBx) (C.D. Cal. Sept. 8, 2009) (Granting Lead Plaintiff’s Motion for Class Certification), the parties entered into a proposed settlement of the action for $29.4 million (plus the cost of providing notice of the settlement to the class).  The Court preliminarily approved the settlement, stating “[Y]ou really have the court’s profound congratulations and compliments,” and, on April 26, 2010, gave final approval to the settlement.
 

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