MURRAY, FRANK & SAILER LLP ANNOUNCES CLASS ACTION LAWSUIT AGAINST RED HAT, INC. ON BEHALF OF SHAREHOLDERS - RHAT
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New York, NY (PrimeZone) July 2, 2004
Murray, Frank & Sailer LLP announces that a class action lawsuit was filed in the United States District Court for the Eastern District of North Carolina on behalf of all purchasers of securities of Red Hat, Inc. (Nasdaq: RHAT) ("Red Hat" or the "Company") from December 18, 2003 through July 12, 2004, inclusive (the "Class Period").
The complaint charges that Red Hat, Matthew Szulik, and Kevin Thompson violated the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company inappropriately recognized revenues from its subscriptions; (2) that as a consequence of the aforementioned practice, the Company manipulated its quarterly earnings as its net income and operating income were, at all relative times, materially overstated; (3) that the Company's financial results were in violation of Generally Accepted Accounting Principles; (4) that the Company lacked adequate internal controls; and (5) that the Company's financial results were materially and artificially inflated at all relevant times.
On July 13, 2004, Red Hat announced that it had corrected the manner in which it recognized revenues for certain of its subscription agreements and, as a result, would restate its audited financial statements for the fiscal years ended February 29, 2004, February 28, 2003, and February 28, 2002, and its unaudited financial statements for the fiscal quarter ended May 31, 2004. The news shocked the market. Shares of Red Hat fell $4.62 or 22.70 percent per share, on July 13, 2004, to close at $15.73 per share.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than thirty years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or acquired the securities of Red Hat between December 18, 2003 and July 12, 2004, inclusive, and sustained damages, you may, no later than September 13, 2004, move the Court to serve as lead plaintiff of the class. 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 online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi or Aaron D. Patton of Murray, Frank & Sailer LLP.
Murray, Frank & Sailer LLP
Eric J. Belfi
Fax: (212) 682-1892
Email: [email protected]