UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF
TENNESSEE WESTERN DIVISION, AT MEMPHIS
PAUL DENTON, On Behalf Of Himself and X No. 00 2345 MI A
All Others Similarly Situated, )
Plaintiff, vs. CLASS ACTION COMPLAINT FOR
) VIOLATION OF FEDERAL SECURITIES
SCB COMPUTER TECHNOLOGY, LAWS
INC., BEN C. BRYANT, JR., T. )
SCOTT COBB, GARY E. JURY TRIAL DEMANDED
MCCARTER and MICHAEL J. )
BOLING, )
Defendants X
Plaintiff, as and for his complaint, alleges the following upon personal
knowledge as to himself and his own acts, and upon information and belief as to
all other matters. Plaintiff's information and belief is based, inter alia, on the
investigation conducted by plaintiff's attorneys, including a review of the press
releases of defendant SCB Computer Technology Inc. . ("SCB" or the
"Company"), filings with the Securities and Exchange Commission (the "SEC")
and articles pertaining to SCB.
SUMMARY OF THE CASE
1. Plaintiff brings this securities class action on behalf of a class of persons who
purchased the common stock of SCB during the period between August 19, 1997
and April 13, 2000 (the "Class Period") and were damaged thereby. During the
Class Period, SCB reported materially false and misleading financial results for
fiscal years 1998, 1999, and for the first three quarters of fiscal year 2000.(1)
As a result of the defendants' wrongful course of conduct, the price of SCB
common stock was artificially inflated throughout the Class Period.
2. At the close of the Class Period, SCB disclosed that during a March 27, 2000
meeting, five SCB employees informed the Company of accounting improprieties.
Upon an investigation of these matters, SCB's accountants, Ernst & Young LLP
("Ernst & Young"), resigned. Defendants revealed that SCB would have to restate
its results for the periods stated above due to the finding of these "accounting
SNIPPETS:
releases of defendant SCB Computer Technology Inc..
filings with the Securities and Exchange Commission
Plaintiff brings this securities class action on behalf of a class of persons who
2000 (the "Class Period") and were damaged thereby.
As a result of the defendants' wrongful course of conduct,
common stock was artificially inflated throughout the Class Period.
five SCB employees informed the Company of accounting improprieties.
Investors still do not know the full scope or magnitude of the impending restatements, only
The jurisdiction of this Court is based upon Section 27 of the Securities Exchange Act of
28 U.S.C. §1391, because defendant SCB maintains its principal place of business in this
Defendant SCB describes itself in its press releases as "a leading provider of information
Defendant Gary E. McCarter, was, until approximately September of 1999, the Chief Financial
Defendants listed in ¶ 11-14 above are collectively referred to herein as the "Individual
Excluded from the Class are defendants, officers and directors of the Company, members of the
press releases and/or statements disseminated to the investing public and the investors in
The Form 10-Q, signed by defendant McCarter, stated that it was prepared in conformance with
On October 6, 1997, an article entitled "Record revenues and profits rolling in for SCB"
Commenting on the seemingly-stellar financial results, defendant Bryant stated:
The 10-Q, stated that "n the opinion of management, all adjustments necessary for a fair
An April 2, 1998 article in The Commercial Appeal entitled "Investors confident in SCB's
Had the truth been known about SCB's false financial reporting and accounting violations, SCB
GAAP are those principles recognized by the accounting profession as the conventions, rules
According to SEC rules, to accomplish the objectives of accurately recording, processing,
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