A spokesman for CBT, the interactive training software, would not comment on the commencement of legal proceedings against it in the US. The suit alleges that that certain of its officers, and directors, had made misrepresentations about its business, earnings growth and financial statements, according to a law firm, representing the plaintiffs.
Reinhardt & Anderson said in a statement that allegedly false and misleading statements inflated CBT's share price to a high of $63 7/8 in July from $44 3/8 in January, before the facts emerged, and the stock collapsed to a low of $9 5/8.
The action has been commenced in the US District Court for the Northern District of California on behalf of people who acquired stock between January 20th 1998 and September 30th, 1998. The plaintiffs have not been identified.
CBT last week replaced its two most senior executives in an effort to regain the confidence of investors. "Recent events at CBT Group have created a crisis in confidence in the company," said Mr Bill McCabe, who took over the helm six weeks after he left his post as chairman. He said the then chairman and chief executive, Mr Jim Buckley, and its chief financial officer, Mr Richard Okumoto, had stepped down.
CBT last March acquired Forefront, a Texas-based provider of computer-based training products in a share swop then valuing the Texas firm at almost $147 million.
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