Zeldes & Haeggquist, LLP issued a press release today announcing an investigation into VeriSign, Inc. (“VeriSign”). The firm is investigating possible breaches of fiduciary duty and other violations of law by certain officers and the Board of Directors at VeriSign related to potential securities violations between June 25, 2012 and October 25, 2012.
VeriSign provides Internet infrastructure and registry services that operate the authoritative directory of .com, .net, .cc, .tv, and .name domain names, and back-end systems for .gov, .jobs, and .edu domain names.
Zeldes & Haeggquist’s investigation concerns whether VeriSign issued materially false and misleading statements regarding the company’s business and financial results and whether they breached their fiduciary duties in regard to VeriSign’s 2012 third quarter renewals and financials.
A recently filed securities class action complaint alleges that certain of VeriSign’s officers and directors misrepresented and/or failed to disclose that: (1) the Department of Justice (“DOJ”) and Department of Commerce were reviewing their domain name pricing arrangements and would likely demand price concessions; (2) VeriSign’s growth in domain name registrations was declining; (3) VeriSign was relying heavily on revenues from “parking” websites and other dubious websites focused on drawing in and monetizing traffic, rather than in providing cogent business leads; and (4) certain of VeriSign’s customers had stopped renewing their agreements with VeriSign as a result of Google and other Internet search engine’s efforts to lower the ranking of websites with little content or that were not updated often.
As a result, VeriSign knew its fiscal year 2012 earnings guidance was not attainable. When VeriSign finally reported this news and the financial results for its third fiscal quarter of 2012, its shares dropped dramatically from its October 25, 2012 closing price of $46.60 per share to close below $40 per share on October 26, 2012, falling $7.21 per share.
If you are a VeriSign shareholder and want additional information regarding this investigation, or if you have information regarding the allegations involved, please contact attorney Amber Eck at (619) 342-8000 or by email.