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IN RE CYBERGUARD CORP SECURITIES LITIGATION Click to find out why . . .



Keywords & Phrases
CaseNo: CCAL178320, CourtName: CLASS ACTION CASES, State: FL Florida, UniqueCaseRef: LCD>CCAL178320, Cyberguard, Dark Fiber, Caprock, Stock, Secondary Offering, Fiber Network, Shares, Revenues, Caprock Communications, Executive Officer, Common Stock, Sales, Loss, Customers, Carrier, Carberry, Mcaleer, Class Action, Act, Revenue, Cyr, Demand, Southwest, United States, Facts, Representations, Misleading, Audit, Assets, Gross Profit, Resellers, Misrepresentations, Gross Margin, Kpmg, Purchased Shares, Federal Securities Laws, Gaap, Chief Executive Officer, Operating Loss, Contracts, Irus , ContentID: 120249618

Case Documents
1   COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 122384
25 pages
HTML
2 2000-09-06 DOCKET
[ see first page and extracted highlights below  ] ItemID: 122387
3 pages
HTML
3 1999-08-23 CONSOLIDATED AMENDED COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 122386
145 pages
PDF
4 1998-09-10 COMPLAINT
[ see first page and extracted highlights below  ] ItemID: 122385
21 pages
PDF
Total Documents: 4 documents , 194 pages
Price: $ 34.95


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1 . COMPLAINT

EXTRACTED KEY WORDS
DARK FIBER
CAPROCK
STOCK
SECONDARY OFFERING
FIBER NETWORK
SHARES
CAPROCK COMMUNICATIONS
CUSTOMERS
CARRIER
CLASS ACTION
MCALEER
REVENUE
SOUTHWEST
DEMAND
CYR
UNITED STATES
EXECUTIVE OFFICER
PURCHASED SHARES
FEDERAL SECURITIES LAWS
IRUS
CONSTRUCTION
INDIVIDUAL DEFENDANTS
INTEGRATED SERVICES
IRUS SOLD
PROJECTIONS
LONG-HAUL FIBER NETWORK
SCALABLE LONG-HAUL FIBER
ACQUIRED CAPROCK
CAPROCK COMMUNICATIONS CORPORATION



                        UNITED STATES DISTRICT COURT

                        NORTHERN DISTRICT OF TEXAS

                              DALLAS DIVISION

   _____________________________________________

   HECTOR ALFARO, On Behalf of
   Himself and All Others Similarly
   Situated,

                           Plaintiff,

       vs.

   CAPROCK COMMUNICATIONS
   CORPORATION, LEO J. CYR, JERE
   W. THOMPSON, JR. and KEVIN W.
   McALEER,

                           Defendants.
   _____________________________________________


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   Civil Action No.

   CLASS ACTION COMPLAINT
SNIPPETS:
  • CLASS ACTION COMPLAINT FOR VIOLATION OF THE FEDERAL SECURITIES LAWS
  • DEMAND FOR JURY TRIAL
  • This is an action on behalf of those who purchased or otherwise acquired CapRock
  • CapRock owns and operates a scalable long-haul fiber network.
  • The Company's fiber network supports the voice, data, bandwidth, and dark fiber services
  • CapRock's network is located throughout the Southwestern region of the United States.
  • Defendants' false and misleading statements concerning the revenues to be derived from its
  • This upsurge in CapRock's stock price caused by defendants' false and misleading statements
  • On July 6, 2000, days after CapRock's Secondary Offering was completed, CapRock revealed that
  • Plaintiff Hector Alfaro purchased shares of CapRock common stock as described in the attached
  • Defendant Leo J. Cyr was, during the Class Period, President and Chief Operating Officer of
  • was, during the Class Period, Chairman of the Board and Chief Executive Officer of the
  • Defendant Kevin W. McAleer was, during the Class Period, Chief Financial Officer of the
  • The Individual Defendants, by reason of their stock ownership and positions with CapRock,
  • CapRock describes itself as a leading facilities-based integrated communications service
  • CapRock's future construction program carried a significant price tag.
  • By April 24, 2000, CapRock's shares continued to succumb to selling pressure associated with
  • We announced plans to extend our network to 7,500 miles by the end of 2001, to build 30
  • This increase was attributable to increases of 125% in carriers' carrier, 116% in integrated
  • The 125% increase resulted primarily from the sale of IRUs and dark fiber leases.
  • Revenues are recognized immediately on IRUs sold from available fiber on completed network
  • This is a class action on behalf of those who purchased or otherwise acquired CapRock stock

  • 2 . DOCKET

    EXTRACTED KEY WORDS
    VDF
    DEFENDANT
    CIVIL ACTION
    ENTRY
    CONSOLIDATED PLAINTIFF
    JUDGE
    ORDER CONSOLIDATING
    BUCHMEYER
    COUNSEL
    REFERENCE MATTER
    DOCKET
    FUTURE PLEADINGS
    ISSUED-4
    MCALEER
    KEVIN
    THOMPSON
    JERE
    CYR
    LEO
    CAPROCK
    HECTOR ALFARO
    DEMAND
    JURY
    ASSIGNMENT
    COURT
    DISTRICT
    CONSOLIDATED LEAD
    SPECIFICS
    JUDGE PAUL STICKNEY
    
    Case docket was last updated on: 09/06/00.
    
    
    Docket as of September 6, 2000 5:11 pm               Page 1
    
    Proceedings include all events.                                   M-STI
    3:00cv1613 Alfaro, et al v. Caprock Comm, et al                          LEAD
                                                                             JURY
                                                                M-STI  LEAD
                                                                JURY
                           U.S. District Court
                   Northern District of Texas (Dallas)
    
                   CIVIL DOCKET FOR CASE #: 00-CV-1613
    
    Alfaro, et al v. Caprock Comm, et al                        Filed: 07/26/00
    Assigned to: Chief Judge Jerry Buchmeyer     Jury demand: Plaintiff
    Demand: $0,000                               Nature of Suit:  850
    Lead Docket: None                            Jurisdiction: Federal Question
    Dkt# in other court: None
    
    Cause: 15:78m(a) Securities Exchange Act
    
    
    HECTOR ALFARO, On behalf of       Marc R Stanley, Attorney at Law
    himself and all others            214/443-0358 FAX
    similarly situated                (COR LD NTC ret)
         plaintiff                    Stanley Mandel & Iola
                                      3100 Monticello Ave
                                      Suite 750
                                      Dallas, TX 75205
                                      USA
                                      214/443-4300
    
    
    ANGELA AMOS, On behalf of         Thomas E Bilek, Attorney at Law
    herself and all others            713/227-9404 FAX
    similarly situated                (COR LD NTC ret)
         consolidated plaintiff       Hoeffner Bilek & Eidman
                                      440 Louisiana
                                      Suite 720
                                      Houston, TX 77002-1634
                                      USA
                                      713/227-7720
    
    
    TERESA A CICALA                   Marc R Stanley, Attorney at Law
         consolidated plaintiff       (See above)
    
    SNIPPETS:
  • Case docket was last updated on:
  • U.S. District Court
  • Northern District of Texas
  • Assigned to: Chief Judge Jerry Buchmeyer Jury demand: Plaintiff
  • HECTOR ALFARO, On behalf of Marc R Stanley, Attorney at Law
  • consolidated plaintiff Hoeffner Bilek & Eidman
  • CAPROCK COMMUNICATIONS CORP
  • KEVIN W MCALEER
  • defendant Leo J Cyr, defendant Jere W Thompson Jr, Kevin W
  • McAleer (Issued-4) (vdf) (Entry date 07/27/00)
  • 7/26/00 -- PRELIMINARY ASSIGNMENT TO Magistrate Judge Paul Stickney
  • 8/28/00 3 ORDER consolidating cases...The above referenced case is
  • CONSOLIDATED with civil action number 3:00-CV-1730-R and
  • (See order for specifics)
  • 8/28/00 -- Consolidated Lead Case
  • 9/6/00 4 ORDER consolidating cases..The above reference matter is
  • All future pleadings shall be filed
  • Buchmeyer) Copies to counsel: 09/06/00 Page1

  • 3 . CONSOLIDATED AMENDED COMPLAINT

    EXTRACTED KEY WORDS
    CYBERGUARD
    REVENUES
    PLAINTIFFS
    COMMON STOCK
    SALES
    LOSS
    CARBERRY
    ACT
    FACTS
    REPRESENTATIONS
    MISLEADING
    EXECUTIVE OFFICER
    AUDIT
    ASSETS
    GROSS PROFIT
    RESELLERS
    MISREPRESENTATIONS
    GROSS MARGIN
    KPMG
    GAAP
    CHIEF EXECUTIVE OFFICER
    OPERATING LOSS
    CONTRACTS
    CYKRGUARD
    SECURITY PRODUCTS
    ALLEGATIONS SET FCLNH
    SUBSTANTIAI
    CYBEFFIUARD
    FRAUDULENT
    
                                     UNITED  STATES  DISTRICT  COURT                         NIGHT     
                              FOR  THE !WJTHERN  DISTRICT  QF                                     FILED
                                                                                 FLORiDA
                                                  MIAMI PIVISION                              
    
    
    
    
    
    STEVEN  CHENEY  at al..  individually  ~rul
    on  behaIf  of  all  others  simikIy  ~ituatcd,                      ;
    
                                        Plaintiff,                       i 1
                      V.
                                                                         1
    CYBERGUARD  CORPORATIOFd,  ROBERT                                    )
    L.  CARBERRY  and  WILLIAM  D.  MURRAY,                              )
    
                                        Defendants.                      ;
    _--- -_l_l---__._____T1_  * .__*  - LI--q"  _"ch-ewmm+qM*
                                                          q_+-. -"---I  x
    
                    CONSQLT'DATED AND  AMENDED  CLASS  ACTION  COMPLAINT
    
             Lead  plabtiffs  Robert  Ciovic,  Michael  Brown,  Sudhir  Mehta,  Anthony  Paoltiico,
    
    I&IO  Miller,  Etiot  Meshularn.  Jorin  Daieanes,  Thomas Schueck and  Mary  LOU Htivey
    
    ("Plaintiffs')  make the  allegations set fclnh  in  this Amended  Class Action  Complaint  upon
    
    information  and belief,  except those allegations  specifically  pertaining  to  Plaintiffs  or 
    
    cour~l.  which  allegations  are based on  Plaintiffs'  personal  knowlerlge.
    
                                                                  1.
                                            NATTJREOFTHEACTION
             I.        This  is a wurities  fraud  class action brought  on  behalf  of  a class (the 
    
    consisting of  in\lestors  who  acguired  the  common  stock of defendant  CyberGuard
    
    &qorarion  ("CyberGuard"  or  the  `Company")  between  November  7,  1996 and August  24,
    
    
    
    3998 (the "Class Period"), and who wecc damaged thereby.  Plaintiffs seek re&iea  under
    
    tht &&tics       and Exctige  Act  of  1934 (the "Exchange Act*`).
    
            2.       The defendants i~ltie:  (a) Robert Carberry, who was CyberGuard's
    
    SNIPPETS:
  • make the allegations set fclnh in this Amended Class Action Complaint upon
  • which allegations are based on Plaintiffs' personal knowlerlge.
  • consisting of in\lestors who acguired the common stock of defendant CyberGuard
  • &qorarion ("CyberGuard" or the `Company") between November 7, 1996 and August 24,
  • tht &&tics and Exctige Act of 1934.
  • KPMG Peat Marwick LLP ("KPMG" and.
  • with the remaining defendants, "Defendants"), is also named as a wendant.
  • Defendants repeattxlly ati materi;lIly uverstatti the revenues,
  • current assets and total assets carried on CykrGuatd's balance sheet in order to convince
  • revenues related to CyberC;uard's purported "sales" of its software products to large
  • CyberGuard was permitted to recognize revenue under GAAP only when goads were shipped
  • CykrGuard investors.
  • net profit, accounts receivable, current assets and total assets was materi~~lly misleading.
  • issued a `clean audit opinian" with respect to the Co,mpany's 1997 fisca1 year finan&
  • communications but newxthelcss permitted the Company to continue its fraudulent accounting
  • accounts rmivable attributable to the Compllny's international resellers were not being paid
  • The facts allqed b&w also compel the conclusion that Defcndarrts' materid
  • previously substantiaI holctings in CyberGuard common stwk md were always made within a
  • misrepresentations at issue here further support the
  • CArberry, Murray, Wheeler and James were high-ranking and financially sophisticated
  • CykrGuard first indicated that the Company would have to mtate its financial statements
  • Cybeffiuard stock had been delisted by NASDAQ.
  • Presidm anb Chief Executive Officer from June 19% until November 10,
  • the Company's gross profit for the quiMer
  • the Company's quarterly operating loss
  • representations were materially false at the time that they were made.
  • Unearned income on service contracts is
  • gross margin produced by the Company during the second quarter,
  • of the Cknpany's network security products increased to $1.

  • 4 . COMPLAINT

    EXTRACTED KEY WORDS
    TRUTH
    ARCA ACUUISITION
    INDICATORS
    REVENUE RECOGNITION
    BASIS
    
                                             UNITED  STATES  DISTRICT                            COURT
                                             SOUTHERN  DISTRICT                         OF  FLORIDA
    
                                                                                  ---X
    
        EDWIN  DICKLER,                     individually                    and  on               Civil
        behalf        of,all              others          similarly
        situated,                                                                                 CLASS
                                                                                                 
                                                Plaintiff,
    
                -  v.  -                                                                    :  JURY 
        CYBERGUARD  CORPORATION,                                 ROBERT  L.
        CARBERRY  and  WILLIAM                            D.  MURRAY,
    
                                                Defendants.
    
    
    
                       Plaintiff,                    individually               and  on  behalf        
    persons         similarly               situated,              by  his  undersigned                
    complaint,               alleges          upon  personal                   knowledge          as 
    
    own  acts,         and  upon  information                               and  belief          as  to
    
    matters,          based  upon,                   inter        alia,        the  investigation      
    through         his  attorneys,                     which         investigation              
    
    things,         a  review             of  the  public                   documents,          
    
    Commission               ("SECVV)  filings,                    analyst          reports,         
    
    media  reports,                regarding                   CyberGuard           Corporation        
    
    the  t'Companytt),                   as  follows:
    
    
    
                                                    JURISDICTION                      AND  VENUE
    
                         1.          The  claims              alleged            herein         arise  
    10(b)          and  20  of  the  Securities                           Exchange            Act  of 
    
    "Exchange            Act"),          15  U.S.C.             §§  78j(b)               and  78t,  and
    C.F.R.          §  240.10b-5              promulgated                 thereunder.
    
                         2.          The  jurisdiction                        of  this        Court    
    
    27  of  the  Exchange                     Act,        15  U.S.C.             §  78aa  and  28 
    
    SNIPPETS:
  • BASIS OF PRESENTATION
  • REVENUE RECOGNITION
  • indicators.
  • The Arca Acuuisition
  • thereunder.
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