According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:
- PEGA had engaged in corporate espionage and misappropriation of trade secrets to better compete against Appian;
- Defendants’ product development and associated success was, in significant part, not the result of its own research and product testing but rather the result of such corporate espionage and trade secret theft;
- Defendants had engaged in a scheme to steal Appian trade secrets, which was not only known to, but carried out through the personal involvement of PEGA’s CEO;
- PEGA’s CEO and other officers and employees did not comply with PEGA’s written Code of Conduct;
- PEGA was “unable to reasonably estimate damages” in the Appian Litigation; and
- as a result of the foregoing, Defendants’ statements about PEGA’s business, operations, prospects, legal compliance, and potential damages exposure in the Appian Litigation were materially false and/or misleading and/or lacked a reasonable basis when made.
The truth regarding PEGA’s fraudulent conduct was revealed after the close of the markets on May 9, 2022, when PEGA issued a press release announcing that the jury in the Appian Litigation had awarded Appian more than $2 billion for PEGA’s misappropriation of trade secrets. In response to this news, PEGA’s stock price fell 21%, from a closing price of $65.93 per share on May 9, 2022, to a closing price of $52.25 on May 10, 2022. As the market continued to digest the verdict, PEGA’s stock price dropped another 8% to close at $48.07 per share the following day.
