Investor Class Action Filed Against Cognyte Software LTD for Securities Fraud Violations (CGNT)

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2023Mar 10

A class action lawsuit has been filed on behalf of those who purchased or acquired Cognyte Software Ltd. ("Cognyte") (NASDAQ: CGNT) common stock between February 2, 2021 through June 28, 2022, both dates inclusive (the “Class Period”). Case Background: On December 16, 2021, after the market closed, a “Threat Report” issued by Meta Platforms, Inc., which included the results of a months-long investigation into the “surveillance-for-hire industry,” revealed that Cognyte regularly targeted journalists, dissidents, critics of authoritarian regimes, families of opposition, and human rights activists around the world, without their knowledge, and collected intelligence on these people by manipulating them to reveal information and/or by compromising their devices and accounts, in violation of Facebook’s “multiple community standards and Terms of Service.” Specifically, the report stated that Cognyte “sells access to its platform which enables managing fake accounts across social media platforms including Facebook, Instagram, Twitter, YouTube, and VKontakte (VK), and other websites to social-engineer people and collect data.” Following this news, Cognyte’s stock price fell $1.96, or 10.3%, over the next two consecutive trading days to close at $17.01 per share on December 20, 2021. Then, on April 5, 2022, Cognyte issued its 2021 Annual Report, disclosing that the company was forced to modify its solutions in response to the Threat Report, “which impacted the manner [its] customers [could] use these solutions.” Additionally, Cognyte missed analyst consensus estimates for the fourth quarter 2021 for non-GAAP earning per share and sales, and significantly undershot the midpoint of its guidance range by several millions of dollars. Following this news, Cognyte’s stock price fell $3.63, or 31.1%, to close at $8.03 per share on April 5, 2022. Then, on June 28, 2022, Cognyte released its first quarter 2022 financial results, missing analyst estimates across the board, including a revenue decline of 25%. Following this news, Cognyte’s stock price fell $1.84, or 28.7%, to close at $4.58 per share on June 28, 2022. The complaint alleges that, throughout the Class Period, Defendants issued materially false and/or misleading statements and/or failed to disclose that: 1) Cognyte created, distributed, and provided reconnaissance tools and services that violated community standards and terms of service of communication network sources and technologies such as Facebook; and 2) the foregoing exposed Cognyte to significant financial and reputational risk. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member. If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.