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More vultures attack Compellent

Ravening lawyers' class action ambulance-chasing

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Two more legal firms have joined in the hunt to extract cash from Compellent and deliver it to aggrieved investors with a modest emolument going to the lawyers for their expenses.

Robins Geller Rudman & Dowd LLP is looking for aggrieved investors to join in its class action and alleges:

...throughout the Class Period, defendants failed to disclose material adverse facts about the Company's true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose: (i) that the Company was experiencing increasing competition which was forcing it to dramatically lower prices in order to continue to generate sales in line with internal expectations; (ii) that as a result of increased competition, the Company was being forced to raise expenditures associated with acquiring new customers far in excess of internal expectations; (iii) that the Company was experiencing significant issues with its sales force which were further complicating and exacerbating the negative impact of slowing sales; and (iv) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.

Izzard Nobel LLP is also seeking class action status in a lawsuit and alleges:

The Complaint charges that Compellent and certain of its officers and executives violated federal securities laws. Specifically, defendants failed to disclose the following material adverse facts: (i) that Compellent was experiencing increasing competition which was forcing it to dramatically lower prices in order to continue to generate sales in line with internal expectations; (ii) that as a result of increased competition, the Company was being forced to raise expenditures associated with acquiring new customers far in excess of internal expectations; (iii) that Compellent was experiencing significant issues with its sales force which were further complicating and exacerbating the negative impact of slowing sales; and (iv) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and growth.

Strange - it looks like a cut 'n paste job from the previous bunch of lawyers. Are they acting in concert?

Imagine the job of Compellent's legal office as it gets the eDiscovery requests winging through the door from three firms of lawyers. Excuse me, could we go through your e-mails and documents to look for evidence that you've been deceiving investors and give us a nice fat fee if we can prove it in court? Oh, and by the way, you can't say no.

Perhaps they could compare notes with STEC's similarly besieged lawyer's office and share best practice?

Compellent has been directing inquiries on the issue to its Investor Relations people who weren't available when we called. We expect them to say that they are cooperating with the lawyers and nothing more. ®

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