Class Action Lawsuit Vs. FalconStor By Dyer & Berens …

The law firm of Dyer & Berens LLP has filed a class action in the United States District Court for the Eastern District of New York on behalf of purchasers of FalconStor Software, Inc. common stock during the period between February 5, 2009 and September 29, 2010.

If you wish to serve as a lead plaintiff, you must seek such an appointment with the court no later than November 30, 2010. A ‘lead plaintiff’ directs the litigation and participates in important decisions including whether to accept a settlement offer and how much of a settlement to accept for the class in the action. The lead plaintiff here will be selected from among applicants claiming the largest loss from investment in the Company during the Class Period. Any member of the putative class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

On September 29, 2010, FalconStor disclosed that its President, CEO and Chairman of the Board, ReiJane Huai, resigned from all of his positions with the Company, effective immediately. According to the Company’s statement, "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 troubling news, FalconStor’s stock price plummeted more than 20 percent.

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business and its prospects.

Specifically, defendants misrepresented and/or failed
to disclose the following adverse facts:

• that the Company was experiencing weak demand for its products and services;
• that the Company 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 the Company and its prospects.