Seventh Class Action Vs. Stec …

Abbey Spanier Rodd & Abrams, LLP commenced a Class Action lawsuit in the United States District Court for the Central District of California on behalf of a class of all persons who purchased or acquired securities of STEC, Inc. between June 16, 2009 and November 3, 2009 inclusive. STEC provides technology solutions and manufactures high performance memory and storage products used in high performance computing.

The Complaint alleges that Defendants violated the federal securities laws by issuing a series of false and misleading statements during the Class Period thereby artificially inflating the price of STEC securities. More specifically, the Complaint alleges that Defendants misrepresented and failed to disclose:

• that STEC over sold its largest customer more inventory than it required;
• the Company overstated the demand for certain products;
• that STEC’s subsequent revenue and financial results for the following year would be negatively impacted; and
• that, as a result, Defendants’ statements during the Class Period lacked a reasonable basis.

The fraudulent statements made by Defendants during the Class Period artificially inflated STEC’s stock price, which enabled Defendants Manouch Moshayedi and Mark Moshayedi to sell 9 million of their personal shares for proceeds of approximately $300 million in a secondary public offering held on August 5, 2009.

On November 3, 2009, STEC announced that one of its largest customers, which accounted for 90% of STEC’s ZeusIOPS SSD business and which had placed a $120 million order for the second half of 2009, would carry 2009 inventory into 2010, placing STEC’s 2010 first quarter results at risk. On this news, shares of STEC fell $9.01 per share, more than 38%, to close on November 4, 2009, at $14.14 per share.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired STEC securities during the Class Period. If you purchased or otherwise acquired STEC securities during the Class Period and lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you are a member of the class, you may, no later than January 5, 2010, request that the Court appoint you as lead plaintiff.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as ‘lead plaintiffs.’

The attorneys at Abbey Spanier have extensive experience in securities class action cases, and have played lead roles in major cases resulting in the recovery of hundreds of billions of dollars to investors.