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November 2013: Securities Class Action Victory for VeriSign, Inc.

November 2013

The firm recently obtained a voluntary dismissal, with prejudice, of a securities class action complaint against our client, VeriSign, Inc. Lead Plaintiff was represented by Robbins Geller, one of the leading securities class action firms.

The Complaint alleged that VeriSign had made misleading projections concerning key aspects of its business as well as certain financial metrics. When VeriSign announced revised information concerning its business and finances after third-quarter 2012, VeriSign’s share price fell (but has since substantially recovered).

Plaintiff brought suit alleging broadly that VeriSign must have been aware that its projections were misleading when made, since they had not come to pass precisely as VeriSign predicted. Rather than wait for plaintiff’s counsel to find and appoint a lead plaintiff while the lawsuit remained pending, Quinn Emanuel filed a comprehensive motion to dismiss the initial complaint within two weeks of being retained. Rather than respond on the merits, plaintiff asked the Court to stay briefing on the motion to dismiss until appointment of a lead plaintiff. While it granted the requested stay, the court noted that the complaint appeared to be “pretty thin.”

In the hope of filing a less “thin” amended complaint after appointment of lead plaintiff, plaintiff’s counsel attempted to contact various former employees of VeriSign. Quinn Emanuel vigorously defended VeriSign’s rights to maintain confidential information and to refrain from assisting plaintiff’s counsel in its investigation, which quickly led to motion practice. Based on the affidavit of plaintiff’s investigator, plaintiff obtained the right to depose an individual from the company, but Quinn Emanuel turned plaintiff’s procedural advantage against them by eliciting information at the deposition during cross-examination that helped to hobble plaintiff’s claim.

Shortly after the deposition, plaintiff’s counsel informed Quinn Emanuel that they were willing to consider a voluntary dismissal of the claim. Quinn Emanuel insisted, and plaintiff agreed, that the parties sign a stipulation that the original and lead plaintiff’s claims would be dismissed with prejudice, which the Court entered.