Manugistic's poor first quarter financial results have led to a class action lawsuit.
Shareholders who bought stock during the final two months of the period have filed an insider trading suit against executives and a class action suit against the organisation.
The lawsuit alleges the plaintiffs bought shares based on claims made by Manugistics' executives that the quarter had got off to an excellent start. It seeks to recoup losses incurred after the stock slump, which followed a profits warning two months later.
In a statement, lawyers Reinhardt & Anderson alleged that "the defendants knowingly misrepresented the business and financial operations of Manugistics with the intent of having the effect of substantially inflating the trading price of Manugistics' common stock".
They further claimed that: "The defendants' fraudulent scheme and the deceptive course of business did artificially inflate the price of Manugistics' common stock during the Class Period and allowed the defendants to reap millions of dollars of insider trading proceeds".
A Manugistics' spokesperson declined to comment because it had not seen the lawsuit.
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