National Elevator Industry Pension Fund v. VeriFone Holdings, Inc.

This case invokes the old adage that the sum is greater than the parts. National Elevator Industry Pension Fund (“National Elevator”), lead plaintiff on behalf of investors who purchased VeriFone Holdings, Inc. (“VeriFone”) stock between August 31, 2006 and April 1, 2008, appeals the dismissal of its securities fraud class action. National Elevator alleged that Veri-Fone, Douglas Bergeron (the company’s Chief Executive Officer and former Chairman of the Board of Directors), and Barry Zwarenstein (the company’s former Chief Financial Officer and Executive Vice President), violated §§ 10(b), 20(a), and 20A of the Securities Exchange Act of 1934 and Securities and Exchange Commission Rule 10-b in connection with a December 2007 restatement of financial results.

In three consecutive quarters, Veri-Fone’s preliminary internal reports accurately showed it had fallen short of its earnings and gross margins projections. Three consecutive times, VeriFone’s CEO and CFO supervised accounting staff as they made baseless multimillion-dollar adjustments that brought reported results in line with expectations. Each time, the CEO and CFO accepted the adjustments without question,…