CMVT Comverse Technology, Inc. (MM)

Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") (http://www.lerachlaw.com/cases/comverse/) today announced that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Comverse Technology Inc. ("Comverse" or the "Company") (NASDAQ:CMVT) common stock during the period between December 14, 2004 and March 13, 2006 (the "Class Period"). If you wish to serve as lead plaintiff, you must move the Court no later than June 19, 2006. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, David A. Rosenfeld or Mario Alba Jr. of Lerach Coughlin at 800/449-4900 or 619/231-1058 or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/comverse/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges Comverse, Kobi Alexander, and David Kreinberg with violations of the Securities Exchange Act of 1934. Defendants Alexander and Kreinberg are referred to herein as the "Individual Defendants." The Company and its subsidiaries engage in the design, development, manufacture, marketing, and support of software, systems, and related services for multimedia communication and information processing applications. The complaint alleges that, during the Class Period, Comverse embarked on a scheme whereby the Company backdated option grants given to the Individual Defendants and other executives ahead of favorable news in order to give the recipients a better chance of profiting from exercising the options. According to the complaint, prior to the Class Period, Defendants issued and filed a series of materially false and misleading statements and quarterly reports with the SEC concerning the Company's financial performance. These statements were materially false and misleading because they misrepresented and failed to disclose the following adverse facts: (a) that the Company backdated option grants given to the Individual Defendants and other executives ahead of favorable news in order to give the recipients a better chance of profiting from exercising the options; (b) that the Company was not properly accounting for additional compensation expenses incurred by this scheme; (c) that the Company lacked adequate internal controls and was therefore unable to ascertain its true financial condition; and (d) that as a result of the foregoing, the values of the Company's income from operations, net income and retained earnings were materially overstated at all relevant times and the Company has admitted that it will be restating its financial statements for its historical financial statements for each of the fiscal years ended January 31, 2005, 2004, 2003, 2002 and 2001 and for the first three quarters of the fiscal year ended January 31, 2006. On March 14, 2006, the Company issued a press release announcing it has created a special committee of its Board of Directors composed of outside directors to review matters relating to the Company's stock option grants, including, but not limited to, the accuracy of the stated dates of option grants and whether all proper corporate procedures were followed. Following this announcement, shares of Comverse common stock declined $4.30 per share, or 15%, to close at $24.85 per share, on extraordinarily heavy trading volume. Then, on April 17, 2006, the Company issued a press release announcing the results of the special committee's review. As a result of the review, the Company revealed "that the actual dates of measurement for certain past stock option grants for accounting purposes differed from the recorded grant dates for such awards." As a result, the Company will need to restate its historical financial statements for each of the fiscal years ended January 31, 2005, 2004, 2003, 2002 and 2001 and for the first three quarters of the fiscal year ended January 31, 2006 because "(a)ny such stock-based compensation charges would have the effect of decreasing the income from operations, net income and retained earnings figures contained in the Company's historical financial statements." Prior to disclosing these adverse facts, the Individual Defendants sold 614,443 shares of their personally-held stock, thereby reaping more than $16 million in gross proceeds. In fact, over 75% of the common stock sold by the Individual Defendants during the Class Period was a product of these improper option grants. Plaintiff seeks to recover damages on behalf of all purchasers of Comverse common stock during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.