STEC Complaint FILED 10 25 12.pdf


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violations of the federal securities laws.
6.

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director of the Company during the Relevant Period, upon information and belief,

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Defendants Manouchehr and Mark shared with their brother Mike material inside,

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proprietary information which he appropriated and, thereafter, sold directly and/or

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indirectly more than one million of his STEC shares to an unsuspecting public in

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addition to the shares sold by his brothers through their respective Trusts in the

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Offering and otherwise.
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Upon information and belief, although he was not an officer or

Compounding their individual wrongdoing as set forth herein, the

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STEC Board and, in particular, its Compensation Committee consisting of

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Defendants Ball, Bahri and Witte, caused STEC to pay out bonuses for 2009 to

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Defendants Manouchehr, Mark and Cook in the amounts of $772,500, $273,000

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and $150,000, respectively, purportedly because they “achieved all of their

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performance objectives” in 2009. Such bonuses were wholly unjustified and a

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waste of the Company’s assets since the members of the Compensation

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Committee, indeed each members of STEC’s Board, knew and did not disclose

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that Defendants Manouchehr, Mark and Cook had each actively manipulated the

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Company’s earnings and projections and otherwise deceived the investing public

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in substantial part, to facilitate the Moshayedi brothers’ ability to unload massive

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amounts of their STEC stockholdings (directly and through the Trust Defendants

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controlled by them) at artificially high prices.
8.

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This is an action brought by the Plaintiff, who purchased 5,000 shares

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of STEC common stock during the period of the wrongdoing alleged herein and

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who has owned STEC shares continuously through the present, against the

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Securities Fraud Defendants to recover his damages from them. This action is also

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brought by Plaintiff derivatively on behalf of STEC to recover for it the damages

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caused by and unjust enrichment of the Securities Fraud Defendants, Mike, the

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members of the Board and the Moshayedi family trusts including, inter alia, the
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