Red Hat hit with class-action lawsuits

[Nomad559]

http://triangle.bizjournals.com/triangle/stories/2004/07/12/daily27.html

-Snip-

A day after Raleigh-based Red Hat announced that it would restate its earnings from the past three years, at least two law firms said Wednesday that they have filed class-action lawsuits against the Raleigh-based Linux reseller.

The restatement announcement and news released in the subsequent conference call proved to be an anchor that pulled the Raleigh-based tech firm's stock down a whopping 22.7 percent below its previous waterline Tuesday.

The precipitous drop didn't escape the attention of Atlanta-based Chitwood & Harley LLP and New York-based Goodkind Labaton Rudoff & Sucharow LLP, which announced in separate press releases Wednesday that they had filed class-action suits against Red Hat and some of its executives. According to the press releases, the law firms accuse Red Hat of defrauding its investors by reporting false and misleading financial information.

"As with any lawsuit, Red Hat is prepared to defend its company," Red Hat spokeswoman Leigh Day said in response to news about the legal action.