… And Ryan & Maniskas …

Ryan & Maniskas, LLP announces that a class action lawsuit has filed in United States District Court for the Eastern District of New York on behalf of purchasers of the common stock of FalconStor Software, Inc. between February 5, 2009 and September 29, 2010, inclusive.

FalconStor and certain of its Officers are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934.

The complaint alleges, among other things:

• that FalconStor was making improper payments to secure a contract with at least one of the Company’s customers; and
• as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about FalconStor and its prospects.

On September 29, 2010, FalconStor announced that ReiJane Huai "resigned from all of his positions with the Company, effective immediately." The press release stated that Mr. Huai "tendered his resignation following his disclosure that certain improper payments were allegedly made in connection with the Company’s contract with one customer." On this news, shares of the Company’s stock fell $0.91 per share, or 22%, to close at $3.15 per share.