RM Law is investigating potential claims against the board of directors of Commvault Systems, Inc. (“Commvault” or the “Company”) (NASDAQ: CVLT). Our investigation concerns potential breach of fiduciary duty claims.
If you own shares of Commvault and would like to learn more about this class action or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (877) 316-3218 or to sign up online, visit: www.rmclasslaw.com/cases/cvlt. You may also email Mr. Maniskas at firstname.lastname@example.org.
According to a securities action pending against the company in the U.S. District Court for the District of New Jersey, the Company, its CEO and CFO improperly deferred revenue recognition during the Class Period, May 7, 2013 to April 24, 2014, to create the illusion that CommVault was a high growth company when, in fact, it was not. The class action alleges that the Company and its top executives engaged “cookie jar” accounting in violation of Generally Accepted Accounting Principles by creating a “cookie jar” of deferred revenue to dip into when earnings were lower than projected.
Additionally, defendants are alleged to have falsely reassured the investing public that revenue was on target. On April 25, 2014, when Commvault ran out of deferred software revenue, it shocked the market with a poor fiscal 2014 fourth quarter, stating that current period software growth was only 10% year-over-year—half of what investors were led to expect—and that fiscal fourth quarter profit had declined 7.8% due to significant deceleration in software revenue growth.
On this news, the Company’s stock fell from $68.58 per share to close at $47.56 per share, or over 30%, on April 25, 2014.