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Pegasystems Inc.

Class Action
  • Active
Investigation
05/09/2022
Initial Lawsuit
05/19/2022
Lawsuit Progression
07/18/2022

Investigation

17 C.F.R. § 229.103(a) (Item 103) provides that a company shall disclose “any material pending legal proceedings”, excluding ordinary routine litigation and certain exceptions. On February 16, 2022, Pegasystems disclosed for the first time that its competitor, Appian, had filed a lawsuit alleging “misappropriation of trade secrets” in May 2020, almost two years prior to its disclosure. A jury later awarded Appian more than $2 billion in damages.

We have opened an investor investigation regarding the matter, for which investors are invited to participate, collaborate and track the outcome of the subsequent investors lawsuit filed on May 19, 2022.

  • Investigation Date
    05/09/2022
  • Hypothetical Affected Period
    May 29, 2020 to May 9, 2022
  • Hypothetical Transgression
    Securities Violation
Main Event

Pegasystems Discloses Jury Verdict

05/09/2022

SEC Filing

Pegasystems discloses that the jury rendered a verdict “against the Company with respect to the trade secrets claim for $2.04 billion in damages and entitling Appian to recover attorney’s fees” in the matter Appian Corp. v. Pegasystems Inc. & Youyong Zou filed May 29, 2020 in state court in Virginia.

“We strongly disagree with the claims and the verdict, and believe the verdict is not supported by the facts of the case or the law, and is the result of significant error. The Company plans to pursue its post-trial remedies to have the verdict set aside. The Company believes it has meritorious defenses and will vigorously pursue appeal of the trial court’s findings, with the appeals process potentially taking years.”

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close Previous close Price variation Percentage variation
$52.25 $65.93 $-13.68 -20.75%
See more on Factual Timeline

Initial Lawsuit

First Complaint - 05/19/2022

This is a class action on behalf of all persons and entities that purchased Pegasystems Inc. common stock between May 29, 2020 and May 9, 2022, inclusive.

  • Filing Date
    05/19/2022
  • Class Period
    05/29/2020 to 05/09/2022
  • Transgression
    Securities Violation
  • Filing Firms
    Klausner, Kaufman, Jensen & Levinson
    Saxena White P.A.
    Hausfeld LLP
  • Case Title
    City of Fort Lauderdale Police And Firefighters' Retirement System v. Pegasystems Inc. et al
  • Docket Number
    1:22-cv-00578
  • Court
    Virginia Eastern District Court
  • Free File
    Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(1) Pegasystems had engaged in corporate espionage and misappropriation of trade secrets to better compete against Appian, a principal competitor;
(2) defendants’ product development and associated success was, in significant part, not the result of its own research and product testing but rather the result of such corporate espionage and trade secret theft;
(3) defendants had engaged in a scheme to steal Appian trade secrets, which was not only known to, but carried out through, the personal involvement of the company’s CEO;
(4) the company’s CEO and other officers and employees did not comply with the company’s written Code of Conduct, including its express prohibition on “stealing” confidential information from a competitor and “misrepresenting your identity in hopes of obtaining confidential information”;
(5) the company was “unable to reasonably estimate damages” in the Appian Litigation; and
(6) as a result of the foregoing, defendants’ statements about Pegasystems’ business, operations, prospects, legal compliance, and potential damages exposure in the Appian Litigation were materially false and/or misleading and/or lacked a reasonable basis when made.

Defendants

  • Company
    Pegasystems Inc.
  • Chief Executive Officer
    Alan Trefler
  • Chief Financial Officer
    Kenneth Stillwell

Lawsuit progression

  • Docket Number
    1:22-cv-00578
  • Court
    Virginia Eastern District Court

The lead plaintiff deadline has passed, we will update this page as the lawsuit progresses.
Last event retrieved on 09/25/2022.

Factual Timeline

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