Five law firms on Monday and Tuesday sued S1 Corp., charging the Atlanta-based Internet banking software company with not disclosing the truth about the potential negative impact of buying Edify Corp. and FICS Group.
The law firms alleged that S1 sold thousands of shares of stock at artificially inflated prices, unfairly reaping millions at the expense of shareholders.
Such lawsuits are not uncommon, sources said. Law firms use software filtering programs to detect dramatic drops in a company's stock or any unusual sales of stock by insiders before a drop in price.
S1 responded Tuesday in a press release that it intends to "vigorously defend itself against recently filed lawsuits." The statement continued, "It is evident that these lawsuits simply follow the unfortunate modern-day practice by which law firms try to cash in on any stock price decline by attributing it to contrived fraud theories."
The law firms are Wolf Haldenstein Adler Freeman & Herz LLP, Cauley & Geller LLP, Bernstein Liebhard & Lifshitz LLP, Chitwood & Harley, and Milberg Weiss Bershad Hynes & Lerach LLP.