New York, NY (PrimeZone) January 4, 2006 - Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for the Middle District of Florida on behalf of shareholders who purchased or otherwise acquired the securities of FARO Technologies, Inc. (“FARO” or the “Company”) (NasdaqNM: FARO) between May 6, 2004 and November 3, 2005, inclusive (the “Class Period”).  FARO, Simon Raab, Gregory A. Fraser, and Barbara R. Smith are named as defendants.

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FARO and its subsidiaries develop, manufacture, market and support software-based three-dimensional measurement devices for manufacturing, industrial, building construction and forensic applications. The complaint charges FARO and certain of its officers and directors with violations of the Securities Exchange Act of 1934, and alleges that throughout the Class Period defendants directly participated in accounting fraud which materially misrepresented the Company's financial results in violation of Generally Accepted Accounting Principles ("GAAP").

At or about the beginning of the Class Period, the Company represented that it had implemented principles that purportedly increased the Company's production capacity, among other improvements, by eliminating overproduction, wait time, inefficient processes, and product defects, among others. During the Class Period, defendants issued strong results and positive guidance which they attributed to, in material part, the Company's purported implementation of adequate controls and efficient practices. However, the complaint alleges that defendants’ Class Period representations regarding its financial performance and prospects were materially false and misleading when made because the Company's internal inventory and accounting controls and procedures were wholly defective and inadequate during the Class Period.

On November 3, 2005, after the market closed, the Company announced that it had incurred $1.6 million in “inventory costing and consumption variances” related to the implementation of a new accounting and inventory management system. Defendant Simon Raab later admitted that the Company had not been able to keep up with customer orders which resulted in “substantially more complex inventory management situations, and . . . substantial inventory increases.” In reaction to this news, the price of FARO stock plummeted $4.39, or 19.6%, from its closing price of $22.38 on November 3, 2005, to finally close on November 4, 2005, at $17.99, on unusually heavy volume.

Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than fifteen years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.

If you purchased or otherwise acquired FARO securities on any exchange between May 6, 2004 and November 3, 2005, and sustained damages, you may, no later than February 6, 2006, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff’s counsel Eric J. Belfi or Christopher S. Hinton of Murray, Frank & Sailer LLP.



Murray, Frank & Sailer LLP
Eric J. Belfi
Christopher S. Hinton

(800) 497-8076 or (212) 682-1818
Fax: (212) 682-1892
Email: [email protected]



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