Berger & Montague filed a class action suit against Carreker
Corporation ("Carreker" or the "Company") and certain of its
officers, on behalf of all persons or entities who
purchased Carreker common stock from July 30, 1999 to December
10, 2002 (the "Class Period").
The complaint alleged that the defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and
Rule 10b-5 promulgated thereunder by the Securities and Exchange
Commission by issuing a series of materially false and
misleading statements to the market between May 20, 1998
and December 10, 2002. According to the complaint,
Carreker filed financial statements during the Class Period
which represented that revenues, income, and earnings were
growing consistently and robustly, and that the Company had
achieved several consecutive quarters of record growth,
attributing its purported success to the Company's business model
and strong demand for its products. According to
the complaint, these statements were materially false and
misleading in that Carreker failed to disclose that it had
artificially inflated its reported revenues, income, and
earnings throughout the class period by engaging in improper
revenue recognition practices.
On December 10, 2002, Carreker disclosed that it was
investigating whether the Company improperly recognized revenues by
accounting for revenues up-front, or in a single quarter,
instead of over several quarters ratably, as required by
applicable generally accepted accounting principles (GAAP).
The improper revenue recognition required a restatement of
Carreker's financial statements filed during the Class Period
beginning with the 1998 fiscal year report.
In response to the disclosure of Carreker's true financial
condition, the market value of its common stock plummeted
from $5.08 per share on December 9, 2002 to $3.93 on December
10, 2002. The decline represents a one-day loss of almost 23%.
The case was settled for $5.25 million in 2006. The
deadline for Class Members to submit claim forms was October 2,