STEC Complaint FILED 10 25 12.pdf


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Defendants to the extent that their violation of the federal securities laws has led to

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investors who purchased the Company’s stock between June 16, 2009 and

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February 23, 2010 (the “Relevant Period”) to sue STEC for their damages, causing

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the Company substantial defense and reputational expenses as well as the eventual

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cost of resolving such claims as well as related expenses caused by the SEC’s

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investigations of the Company and the Moshayedis.
11.

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devices for computer systems. STEC’s customers included original equipment

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manufacturers (“OEMs”) such as EMC, IBM, Hitachi, Hewlett-Packard (“HP”)

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and Sun Microsystems (“Sun”), who, in turn, manufactured high performance

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storage and server systems for large enterprises.
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During the Relevant Period, STEC was a manufacturer of data storage

STEC claimed that it manufactured the industry’s most

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comprehensive line of solid-state drives (“SSDs,” also known as “flash drives”). A

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solid state drive is used for storing information in a computer system. Whereas

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older hard disk drive (“HDD”) technologies stored information on

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electromechanical spinning disks, an SSD has no moving parts, but instead retains

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information on static computer chips. Because SSDs have no moving parts, they

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have certain performance advantages over HDDs; they are faster, more energy

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efficient and have longer service lives. However, SSDs are significantly more

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expensive than HDDs.
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STEC’s flagship product, the ZeusIOPS, was, during the Relevant

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Period, a high-performance SSD advertised by the Company as being able to

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access stored data at much faster speeds than both HDDS and other SSDs, due to

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the Company’s proprietary architecture.
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The Company was founded by the three Moshayedi brothers in 1990.

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Thereafter, the Moshayedis continued as STEC senior officers and directors. At all

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relevant times, Defendant Manouchehr was STEC’s Chief Executive Officer

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(“CEO”) and Chairman of the Company’s Board of Directors. At all relevant
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