GenomeWeb News incorrectly reported last week that Ciphergen was named in a second class-action lawsuit alleging that the company and certain of its officers and directors misled shareholders. In fact, the company is being sued by one law firm, Kaplan Fox & Kilsheimer, which disclosed its class-action complaint on Dec. 5.
The Kaplan Fox & Kilsheimer suit, filed in the United States District Court for the Northern District of California, alleges Ciphergen issued a series of "false and misleading statements" regarding its financial condition between Aug. 8 and Nov. 16.
On Aug. 8, Ciphergen released its second-quarter earnings. On Nov. 6, the company said that its audit committee is investigating the recognition of around $500,000 in sales recorded in that quarter. As a result, the company, which has enlisted the help of undisclosed "external accounting advisors," said it would delay the release of its third-quarter financial results.
On Nov. 16, Ciphergen disclosed that its audit committee had determined that the company's second-quarter results need to be restated and could not be trusted.
The restatement would reduce the quarter's reported revenue by 7 percent, or $503,000, and increase reported net loss by 3 percent, or $301,000, Ciphergen said at the time.
The suit claims that Ciphergen's original second-quarter financial results, which reported a 10-percent slide in revenue and a 30-percent increase in losses, artificially inflated share prices, and that when the company publicized its audit committee's findings, the stock plummeted 21percent, from $1.73 to $1.36 per share.
Investors who purchased Ciphergen' stock between Aug. 8 and Nov. 16 are covered under the class-action status, according to Kaplan Fox & Kilsheimer.
Shares in Ciphergen have fallen around 30 percent since news of the suit broke. The stock was trading down 11.7 percent, or $.11, at $.83 in mid-afternoon trading today, which is the stock's 52-week low.