[ New Contents | Search | Post | Reply | Next | Previous | Up ]
From: EndFraud.com, CyberGuard Corporation
Time: 8:30:10 AM
In a high-tech world there are a lot of people that don't want to give up control of management and where they may be excellent technicians, they leave a lot to be desired as managers. Many of them are not smart enough to bring in professional management to protect their company and its shareholders.
As things spin out of control management often adds a patch here and a patch there the same way they would do it if they were dealing with a software glitch. Patches don't work in companies, they only delay an eventual solution.
We don't think that CyberGuard was that kind of situation. It appears as though management was just trying to suck investors in. The fact that management was dismissed and that the auditors resigned indicates that this was a real mess. Unpleasantly, investors bore the brunt of managements mistakes. Robert A. Spira Chapman Spira and Carson LLC
CyberGuard Corporation (NASDAQ: CYBG)
A class action has recently been filed on behalf of shareholders of CyberGuard Corporation (Nasdaq: CYBG) "CyberGuard" or the "Company") between January 26, 1998, and August 21, 1998, inclusive (the "Class Period"). The complaint charges CyberGuard and certain officers and directors of the Company during the relevant time period with violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that defendants issued a series of materially false and misleading financial statements and that CyberGuard engaged in the improper recognition of revenue from its distributors and resellers, all of which caused the price of CyberGuard common stock to be artificially inflated during the Class Period. On August 24, 1998, CyberGuard stunned investors by announcing that the Company would be restating downward its previously reported revenues for the third quarter of 1998, the period ending March 31, 1998. The Company disclosed that its Audit Committee had reviewed its revenue recognition policies to distributors and resellers and determined that a restatement was necessary. The press release also revealed that the Company currently estimates that the magnitude of the restatement is $2.5 million. Further, CyberGuard announced that it had convened a "Special Committee" to assume control of the Company and that the Company's CEO and CFO had been "temporarily suspended from management pending the Special Committee's review." Finally, the Company announced that KPMG Peat Marwick LLP had resigned as the Company's independent auditors at the close of business on August 21, 1998.