PEGASYSTEMS INC. SHAREHOLDERS HAVE AN OPPORTUNITY TO RECOVER THEIR INVESTMENT LOSSES
Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired Pegasystems Inc. (“Pegasystems” or the “Company”) (NASDAQ: PEGA) common stock between May 29, 2020 and May 9, 2022, inclusive. The lawsuit seeks to recover Pegasystems shareholders’ investment losses.
If you purchased common stock in Pegasystems Inc. between May 29, 2020 and May 9, 2022, inclusive, and would like to discuss your legal rights and/or options, please click “Join Class Action” above.
Pegasystems develops customer relationship management (“CRM”) software, which has a very competitive market. Pegasystems repeatedly stated that the “market for our offerings is intensely competitive, rapidly changing, and highly fragmented” and that Pegasystems was subject to “significant competition” from other technology vendors. In addition, the Company assured investors that it had internally developed its products. Pegasystems also stated that the Company faced a risk that competitors may “appropriate our intellectual property.”
Plaintiff alleges that unbeknownst to investors, however, Pegasystems’ products and, thus, the revenue generated from those products were, in large part, the result of theft of trade secrets from one of the Company’s competitors. On May 29, 2020, Pegasystems was sued by one of its principal competitors, Appian Corporation (“Appian”) in Virginia circuit court for stealing its trade secrets and violating the commonwealth’s computer crime law (the “Appian Litigation”). The lawsuit alleged that Pegasystems retained an employee of a government contractor from 2012 to 2014 to secretly access and learn about Appian’s software and pass the information on to Pegasystems in order to improve the Company’s products and better train its sales force.
Plaintiff alleges that in violation of SEC reporting requirements, for nearly two full years, Pegasystems never publicly disclosed Appian’s lawsuit in its SEC filings. Pegasystems did not even disclose the existence of this lawsuit until it filed its 2021 Annual Report on February 16, 2022 – i.e., just one month before a jury trial was scheduled to begin on March 21, 2022.
After the close of the markets on May 9, 2022, Pegasystems revealed that the Virginia circuit court jury awarded Appian more than $2 billion for Pegasystems’ trade secret misappropriation. On this news, the price of Pegasystems common stock fell almost 21% to close at $52.25 per share on May 10, 2022. According to press reports, during the seven-week trial, the jury was presented with substantial evidence supporting Appian’s claims, including videos, emails, and text messages, and evidence that Alan Trefler (“Trefler”), Pegasystems’ Founder and Chief Executive Officer (“CEO”), personally attended a meeting with the “spy” and received Appian trade secrets supplied by the “spy.” During the trial, CEO Trefler admitted that it was “inappropriate” for Pegasystems to have hired the contractor and that the Pegasystems employees who gained access to Appian trial software “shouldn’t have done it.” The jury found that Pegasystems engaged in “willful and malicious” misappropriation of Appian’s trade secrets.
Plaintiff alleges that Defendants made materially false and misleading statements throughout the Class Period, including by failing to disclose that: (1) Pegasystems had misappropriated trade secrets to better compete against Appian, a principal competitor; (2) Defendants’ product development and associated success was, in significant part, not the result of its own research and product testing but rather the result of corporate espionage and trade secret theft; and (3) Defendants had engaged in a scheme to steal Appian trade secrets, which was not only known to, but carried out through, the personal involvement of the Company’s CEO.
If you wish to serve as lead plaintiff, you must move the Court no later than July 18, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery does not require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.
Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.
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