Synopsys Inc. (Mountain View, CA) reported that shareholders filed a class action lawsuit in the US District Court for the Northern District of California. The suit covers the period from December 3, 2003, through August 18, 2004, and charges Synopsys' Chairman and CEO Aart de Geus, Senior Vice President and CFO Steven Shevick, and Corporate Controller Richard Rowley with failing to disclose, and misrepresenting, material adverse facts that were known to them or recklessly disregarded by them.
Specifically, the complaint alleges that Synopsys knew or recklessly disregarded the fact that renewals of up-front license bookings, which it had touted as being strong, were not materializing and were in fact becoming substantially more averse to its customer base due to the large up-front cash payments that Synopsys required.
Also, Synopsys was not able to achieve substantial growth and was not able to capture market share gains through the technological advancements in its products, which defendants touted as a means for achieving such an end; and that Synopsys knew or recklessly disregarded the fact that demand for its products would not continue to be strong despite a conservative spending environment.
