And Another One, Kaplan Fox, Filed Class Action Vs. Violin Memory

Kaplan Fox & Kilsheimer LLP has filed a class action suit in the United States District Court for the Northern District of California against Santa Clara, California-based Violin Memory, Inc.

The complaint is brought on behalf of persons and/or entities who purchased or otherwise acquired the common stock of Violin Memory pursuant and/or traceable to the company’s registration statement filed with the U.S. SEC on Form S-1/A on September 16, 2013, and prospectus filed with the SEC on Form 424(b)(4) on September 27, 2013, in the company’s IPO” of 18 million shares of common stock at a price of $9.00 per share.

Defendants named in the action include the company, its former president and CEO, Don Basile, Violin Memory’s directors who signed the registration statement, as well as the underwriters of Violin Memory’s IPO, including J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc., Robert W. Baird & Co., and Pacific Crest Securities LLC.

The complaint alleges that the defendants violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 because the registration statement contained untrue statements of material facts or omitted to state material facts necessary to make the statements made not misleading, and was not prepared in accordance with the applicable SEC rules and regulations governing its preparation.

In particular, the complaint alleges that the registration statement failed to disclose that at the time of the IPO, Violin Memory was experiencing material difficulties building and developing PCIe flash memory cards that were compliant with Toshiba’s specifications, and the company was experiencing material difficulties optimizing its PCIe flash memory cards for its customers; and further, that at the time of the IPO, the sales and revenues had already been negatively affected by the reprioritization of federal agencies’ budgets ahead of the federal government shutdown, which caused to lose material federal projects, or caused revenue from such projects to be indefinitely deferred.