[Incorrigible]

Of course he sold his shares!  I would have too if I had some old GS stock lying around. 

[Calpernia]

http://www.iposecuritieslitigation.com/TIBCO.PDF

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UNITED STATES DISTRICT COURT

Tibco Software, Inc.

SOUTHERN DISTRICT OF NEW YORK

IN RE INITIAL PUBLIC OFFERING SECURITIES

LITIGATION

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Master File No. 21 MC 92 (SAS)

IN RE TIBCO SOFTWARE, INC. INITIAL

PUBLIC OFFERING SECURITIES LITIGATION

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01 Civ. 6110 (SAS)(MBM)

CONSOLIDATED AMENDED

CLASS ACTION COMPLAINT

FOR VIOLATIONS OF THE

FEDERAL SECURITIES LAWS

Plaintiffs, by their undersigned attorneys, individually and on behalf of the Class

described below, upon information and belief, based upon, inter alia, the investigation of

counsel, which includes a review of public announcements made by Defendants, interviews with

individuals with knowledge of the acts and practices described herein, Securities and Exchange

Commission ("SEC") filings made by Defendants, press releases, and media reports, except as to

Paragraph 15 applicable to the named Plaintiffs which is alleged upon personal knowledge, bring

this Consolidated Amended Complaint (the "Complaint") against the Defendants named herein,

and allege as follows:

NATURE OF THE ACTION

1.

This is a securities class action alleging violations of the federal securities laws in

connection with the initial public offering conducted on or about July 13, 1999 of 7,300,000

shares of Tibco Software, Inc. ("Tibco" or the "Issuer") at $15.00 per share (the "IPO"), the

follow-on public offering conducted on or about March 21, 2000 (the "Secondary Offering") of

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5,000,000 shares of Tibco at $106.00 per share (the Secondary Offering), and the trading of

Tibco common stock in the aftermarket from the date of the IPO through December 6, 2000,

inclusive (the "Class Period"). The IPO and the Secondary Offering will be, at varying times,

collectively referred to hereinafter as the "Offerings."

2.

In connection with these Offerings, certain of the underwriters named as

Defendants herein participated in a scheme to improperly enrich themselves through the

manipulation of the aftermarket trading in Tibco common stock following the IPO.

3.

In this regard, the IPO Underwriter Defendants created artificial demand for Tibco

stock by conditioning share allocations in the IPO upon the requirement that customers agree to

purchase shares of Tibco in the aftermarket and, in some instances, to make those purchases at

pre-arranged, escalating prices ("Tie-in Agreements").

4.

As part of the scheme, the IPO Underwriter Defendants required their customers

to repay a material portion of profits obtained from selling IPO share allocations in the

aftermarket through one or more of the following types of transactions: (a) paying inflated

brokerage commissions; (b) entering into transactions in otherwise unrelated securities for the

primary purpose of generating commissions; and/or (c) purchasing equity offerings underwritten

by IPO Underwriter Defendants, including, but not limited to, secondary (or add-on) offerings

that would not be purchased but for the Defendants unlawful scheme alleged herein.

(Transactions (a) through (c) above will be, at varying times, collectively referred to hereinafter

as "Undisclosed Compensation").

5.

In addition, the IPO Underwriter Defendants' scheme enabled certain of them to

further capitalize on the artificial inflation in Tibco's stock by underwriting the Secondary

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Offering and receiving substantial fees in connection therewith -- in fact, the amount of disclosed

compensation paid was directly tied to Tibco's manipulated stock price.

6.

In connection with the IPO, Tibco filed with the SEC a registration statement

("IPO Registration Statement") and a prospectus ("IPO Prospectus"). The IPO Registration

Statement and IPO Prospectus will be, at varying times, collectively referred to hereinafter as the

"IPO Registration Statement/Prospectus." The IPO Registration Statement/Prospectus was

declared effective by the SEC as of July 13, 1999.

7.

The IPO Registration Statement/Prospectus was materially false and misleading in

that it failed to disclose, among other things further described herein, that the IPO Underwriter

Defendants had required Tie-in Agreements in allocating shares in the IPO and would receive

Undisclosed Compensation in connection with the IPO.

8.

In connection with the Secondary Offering, Tibco filed with the SEC a

registration statement (the "Secondary Offering Registration Statement") and a prospectus (the

"Secondary Offering Prospectus"). The Secondary Offering Registration Statement and the

Secondary Prospectus will be, at varying times, collectively referred to hereinafter as the

"Secondary Offering Registration Statement/Prospectus." The Secondary Offering Registration

Statement/Prospectus was declared effective by the SEC on or about March 21, 2000.

9.

The Secondary Offering Registration Statement/Prospectus was materially false

and misleading in that it misrepresented or failed to disclose, among other things further

described herein, that the price at which the Secondary Offering was sold to the public was

artificially inflated and the product of a manipulated market. Also omitted from disclosure in the

Secondary Offering Registration Statement/Prospectus, was the material fact that the demand for

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the Secondary Offering was artificially inflated. Specifically, customers of the underwriters

named as Defendants herein in connection with the Secondary Offering, in order to receive

allocations of shares in this IPO and/or other "hot" initial public offerings, were required by these

Defendants to purchase shares in the Secondary Offering.

10.

As part and parcel of the scheme alleged herein, certain of the underwriters named

as Defendants herein also improperly utilized their analysts, who, unbeknownst to investors,

were compromised by conflicts of interest, to artificially inflate or maintain the price of Tibco

stock by issuing favorable recommendations in analyst reports.

11.

The Individual Defendants (defined below) not only benefitted from the

manipulative and deceptive schemes described herein as a result of their personal holdings of the

Issuer's stock, these Defendants also knew of or recklessly disregarded the conduct complained

of herein through their participation in the "Road Show" process by which underwriters generate

interest in public offerings.

JURISDICTION

12.

This Court has jurisdiction over the subject matter of this action pursuant to

Section 22 of the Securities Act of 1933 (the "Securities Act") (15 U.S.C. § 77v) and Section 27

of the Securities Exchange Act of 1934 (the "Exchange Act") (15 U.S.C. § 78aa) and 28 U.S.C.

§ 1331.

13.

Plaintiffs bring this action pursuant to Sections 11 and 15 of the Securities Act (15

U.S.C. §§ 77k and 77o) and Sections 10(b) and 20(a) of the Exchange Act as amended (15

U.S.C. §§ 78j(b) and 78t(a)), and Rule 10b-5 promulgated thereunder (17 C.F.R. § 240.10b-5).

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Venue is proper in this District as many of the material acts and injuries alleged herein occurred

within the Southern District of New York.

14.

In connection with the acts alleged in the Complaint, Defendants, directly or

indirectly, used the means and instrumentalities of interstate commerce, including, but not

limited to, the mails, interstate telephone communications and the facilities of the national

securities markets.

PARTIES

PLAINTIFFS

15.

Plaintiffs Vladimir Spira, M.D., FAAP, Beata Spira, and Raymond Agnello, Jr.

(collectively “Plaintiffs”) purchased or otherwise acquired shares of Tibco common stock

traceable to the Offerings, in the open market or otherwise during the Class Period, at prices that

were artificially inflated by Defendants conduct and were damaged thereby.

DEFENDANTS

THE UNDERWRITER DEFENDANTS

16.

Plaintiffs hereby incorporate by reference the “Underwriter Defendants” section of

the Master Allegations as if set forth herein at length.

17.

The following investment banking firms acted in the following capacities with

respect to the IPO and substantially participated in the unlawful conduct alleged herein:

POSITION

LEAD MANAGER

Goldman Sachs

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UNDERWRITER

CO-MANAGERS

Bear Stearns

DB Alex. Brown (as successor- in- interest

to Deutsche Bank)

Deutsche Bank

SYNDICATE MEMBERS

S.G. Cowen

CSFB

Robertson Stephens (as successor-in-interest

to BancBoston)

BancBoston

18.

The Defendants identified in the preceding paragraph will be, at varying times,

collectively referred to hereinafter as the "IPO Underwriter Defendants."

19.

The following investment banking firms acted in the following capacities with

respect to the Secondary Offering and substantially participated in the wrongs alleged herein:

POSITION

LEAD MANAGER

CO-MANAGERS

NAME OF UNDERWRITER

Goldman Sachs

Bear Stearns

DB Alex. Brown (as successor-in-interest to

Deutsche Bank)

Deutsche Bank

S.G. Cowen

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20.

The Defendants identified in the preceding paragraph will be, at varying times,

collectively referred to hereinafter as the "Secondary Offering Underwriter Defendants."

Collectively, the IPO Underwriter Defendants and the Secondary Offering Underwriter

Defendants, will be, at varying times, referred to hereinafter as the "Underwriter Defendants."

THE ISSUER DEFENDANTS

THE ISSUER

21.

At the time of the Offering, Tibco was a Delaware corporation with its principal

executive offices located in Palo Alto, California. Defendant Tibco, as set forth in the IPO

Registration Statement/Prospectus, describes itself as follows as “a leading provider of software

solutions that enable businesses to integrate internal operations, business partners and customer

channels in real-time.”

THE INDIVIDUAL DEFENDANTS

22.

Defendant Vivek Y. Ranadive (“Ranadive”) served, at all relevant times, as the

Issuer's President, Chief Executive Officer and Chairman of the Board of Directors. Ranadive

signed the IPO Registration Statement and the Secondary Offering Registration Statement.

23.

Defendant Paul G. Hansen (“Hansen”) served, at all relevant times, as the Issuer's

Executive Vice President of Finance and Chief Financial Officer. Hansen signed the IPO

Registration Statement and the Secondary Offering Registration Statement.

24.

Defendant Douglas M. Atkin (“Atkin”) served, at all relevant times, as a member

of the Issuer's Board of Directors. Atkin signed the IPO Registration Statement and Secondary

Offering Registration Statement.

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25.

Defendant Yogen K. Dalal (“Dalal”) served, at all relevant times, as a member of

the Issuer's Board of Directors. Dalal signed the IPO Registration Statement and Secondary

Offering Registration Statement.

26.

Defendant Edward R. Kozel (“Kozel”) served, at all relevant times, as a member

of the Issuer's Board of Directors. Kozel signed the IPO Registration Statement and the

Secondary Offering Registration Statement.

27.

Defendant Donald J. Listwin (“Listwin”) served, at all relevant times, as a

member of the Issuer's Board of Directors. Listwin signed the IPO Registration Statement and

Secondary Offering Registration Statement.

28.

Defendant Larry W. Sonsini (“Sonsini”) served, at all relevant times, as a member

of the Issuer's Board of Directors. Sonsini signed the IPO Registration Statement and Secondary

Offering Registration Statement.

29.

Defendant John G. Taysom (“Taysom”) served, at all relevant times, as a member

of the Issuer's Board of Directors. Taysom signed the IPO Registration Statement and Secondary

Offering Registration Statement.

30.

Defendant Phillip E. White (“White”) served, at all relevant times, as a Director

member of the Issuer's Board of Directors. White signed the Secondary Offering Registration

Statement.

31.

Defendant Philip Wood (“Wood”) served, at all relevant times, as a member of

the Issuer's Board of Directors. Wood signed the IPO Registration Statement and the Secondary

Offering Registration Statement.

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32.

Defendants Ranadive, Hansen, Atkin, Dalal, Kozel, Listwin, Sonsini, Taysom,

White and Wood will be, at varying times, collectively referred to hereinafter as the "Individual

Defendants."

33.

Defendant Rajesh Mashruwala (“Mashruwala”) served, at all relevant times, as

the Issuer’s Executive Vice President of Sales and Marketing.

34.

Defendant Robert Stefanski (“Stefanski”) served, at all relevant times, as the

Issuer’s Secretary and Executive Vice President.

35.

Defendant Richard Tavan (“Tavan”) served, at all relevant times, as the Issuer’s

Executive Vice President of Engineering and Operations.

36.

The Issuer, the Individual Defendants and Defendants Mashruwala, Stefanski and

Tavan will be, at varying times, collectively referred to hereinafter as the "Issuer Defendants."

CLASS ACTION ALLEGATIONS

37.

Plaintiffs bring this action as a class action pursuant to Rule 23(a) and (b)(3) of

the Federal Rules of Civil Procedure on behalf of a class consisting of all persons and entities

who purchase or otherwise acquired the common stock of the Issuer during the Class Period and

were damaged thereby (the "Class"). Excluded from the Class are Defendants herein,

Defendants' legal counsel, members of the immediate family of the Individual Defendants, any

entity in which any of the Defendants has a controlling interest, and the legal representatives,

heirs, successors or assigns of any of the Defendants.

38.

Members of the Class are so numerous that joinder of all members is

impracticable.

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(a)

Millions of shares of common stock were sold in the Offerings, and the

stock was actively traded during the Class Period; and

(b)

While the exact number of Class members is unknown to the Plaintiffs at

this time and can only be ascertained through appropriate discovery, Plaintiffs believe that there

are hundreds, if not thousands, of Class members who purchased or otherwise acquired the

Issuers common stock during the Class Period.

39.

Plaintiffs' claims are typical of the claims of the other members of the Class.

Plaintiffs and the other members of the Class have sustained damages because of Defendants

unlawful activities alleged herein. Plaintiffs have retained counsel competent and experienced in

class and securities litigation and intend to prosecute this action vigorously. The interests of the

Class will be fairly and adequately protected by Plaintiffs. Plaintiffs have no interests that are

contrary to or in conflict with those of the Class which Plaintiffs seek to represent.

40.

A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy. Plaintiffs know of no difficulty to be encountered in the

management of this action that would preclude its maintenance as a class action. Furthermore,

since the damages suffered by individual members of the Class may be relatively small, the

expense and burden of individual litigation make it economically impracticable for the members

of the Class to seek redress individually for the wrongs they have suffered.

41.

The names and addresses of the record purchasers of the Issuers' common stock

are available from the Issuer, its agents, and the underwriters who sold and distributed the Issuers

common stock in the IPO and Secondary Offering. Notice can be provided to Class members via

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a combination of published notice and first class mail using techniques and forms of notice

similar to those customarily used in class actions arising under the federal securities laws.

42.

Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a)

Whether the federal securities laws were violated by Defendants'

misconduct as alleged herein;

(b)

Whether the IPO Registration Statement/Prospectus omitted and/or

misrepresented material facts;

(c)

Whether the Secondary Offering Registration Statement/Prospectus

omitted and/or misrepresented material facts;

(d)

Whether Defendants participated in the course of conduct complained of

herein;

(e)

Whether, solely with respect to claims brought under the Exchange Act,

the Defendants named thereunder acted with scienter; and

(f)

Whether the members of the Class have sustained damages as a result of

Defendants' conduct, and the proper measure of such damages.

SUBSTANTIVE ALLEGATIONS

43.

Plaintiffs hereby incorporate by reference the “Introductory” section of the Master

Allegations, as if set forth herein at length. Plaintiffs also adopt and incorporate herein by

reference the allegations set forth in the Master Allegations that specifically relate to each of the

Underwriter Defendants, as if set forth herein at length.

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THE IPO

44.

Tibco's IPO of 7,300,000 shares was priced at $15.00 per share on or about July

13, 1999. The sale and distribution of this firm commitment offering was effected by an

underwriting syndicate consisting of, among others, the IPO Underwriter Defendants.

Additionally, Tibco granted the underwriting syndicate an option to purchase a maximum of

1,095,000 additional shares at the initial offering price less underwriting discounts and

commissions.

45.

On the day of the IPO, the price of Tibco common stock shot up dramatically,

trading as high as $40.00 per share, or more than 166% above the IPO price on substantial

volume. This "impressive" debut, however, was not the result of normal market forces; rather, it

was the result of Defendants' unlawful practices more fully described herein.

46.

The unlawful practices continued during the Class Period as the price of Tibco

rose dramatically. For example, on March 9, 2000, less than two weeks before the Secondary

Offering, Tibco reached a high of $441.00 per share (unadjusted for a 3-for-1 split on February

22, 2000), a staggering 2840% above the IPO price.

UNLAWFUL CONDUCT IN CONNECTION WITH THE IPO

47.

Consistent with their conduct in other initial public offerings as set forth in the

Master Allegations, the Underwriter Defendants engaged in manipulative and/or other unlawful

practices described more fully herein in connection with the Tibco IPO.

48.

Customers of each of the IPO Underwriter Defendants, as a condition to obtaining

an allocation of stock in the IPO, were required or induced to enter into Tie-in Agreements

and/or pay Undisclosed Compensation.

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THE IPO REGISTRATION STATEMENT/PROSPECTUS

WAS MATERIALLY FALSE AND MISLEADING

49.

In conducting the IPO, the IPO Underwriter Defendants violated Regulation M

promulgated pursuant to the Exchange Act. Rule 101(a) of Regulation M reads as follows:

Unlawful Activity. In connection with a distribution of securities, it

shall be unlawful for a distribution participant or an affiliated

purchaser of such person, directly or indirectly, to bid for,

purchase, or attempt to induce any person to bid for or purchase, a

covered security during the applicable restricted period.

17 C.F.R § 242.101.

50.

As explained by the SECs Staff Legal Bulletin No. 10, dated August 25, 2000, tie-

in agreements violate Regulation M:

Tie-in agreements are a particularly egregious form of solicited

transactions prohibited by Regulation M. As far back as 1961,

the Commission addressed reports that certain dealers participating

in distributions of new issues had been making allotments to their

customers only if such customers agreed to make some comparable

purchase in the open market after the issue was initially sold. The

Commission said that such agreements may violate the anti-

manipulative provisions of the Exchange Act, particularly Rule

10b-6 (which was replaced by Rules 101 and 102 of Regulation M)

under the Exchange Act, and may violate other provisions of the

federal laws.

Solicitations and tie-in agreements for aftermarket purchases

are manipulative because they undermine the integrity of the

market as an independent pricing mechanism for the offered

security. Solicitations for aftermarket purchases give purchasers

in the offering the impression that there is a scarcity of the offered

securities. This can stimulate demand and support the pricing of

the offering. Moreover, traders in the aftermarket will not know

that the aftermarket demand, which may appear to validate the

offering price, has been stimulated by the distribution participants.

Underwriters have an incentive to artificially influence aftermarket

activity because they have underwritten the risk of the offering, and

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a poor aftermarket performance could result in reputational and

subsequent financial loss. (Emphasis added).

51.

In particular, the IPO Registration Statement/Prospectus stated:

In connection with the underwritten offering, the underwriters may

purchase and sell shares of common stock in the open market.

These transactions may include short sales, stabilizing transactions

and purchases to cover positions created by short sales. Short sales

involve the sale by the underwriters of a greater number of shares

then they are required to purchase in the underwritten offering.

Stabilizing transactions consist of certain bids or purchases made

for the purpose of preventing or retarding a decline in the market

price of the common stock while the offering is in progress.

The underwriters also may impose a penalty bid. This occurs when

a particular underwriter repays to the underwriters a portion of the

underwriting discount received by it because the representatives

have repurchased shares sold by or for the account of such

underwriter in stabilizing or short covering transactions.

These activities by the underwriters may stabilize, maintain or

otherwise affect the market price of the common stock. As a result,

the price of the common stock may be higher than the price that

otherwise might exist in the open market. If these activities are

commenced, they may be discontinued by the underwriters at any

time. These transactions may be effected on the Nasdaq National

Market, in the over-the-counter market or otherwise.

52.

The statements contained in the previous paragraph were materially false and

misleading because the IPO Underwriter Defendants required customers to commit to Tie-in

Agreements and created the false appearance of demand for the stock at prices in excess of the

IPO price and in violation of Regulation M. At no time did the IPO Registration

Statement/Prospectus disclose that the IPO Underwriter Defendants would require their

customers to engage in transactions causing the market price of Tibco common stock to rise, in

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transactions that cannot be characterized as stabilizing transactions, over-allotment transactions,

syndicate covering transactions or penalty bids.

53.

Because the Undisclosed Compensation was, in reality, underwriter

compensation, it was required to be disclosed in the IPO Registration Statement/Prospectus. As

Regulation S-K, Item 508 (e) provides:

Underwriters Compensation. Provide a table that sets out the

nature of the compensation and the amount of discounts and

commissions to be paid to the underwriter for each security and in

total. The table must show the separate amounts to be paid by the

company and the selling shareholders. In addition, include in the

table all other items considered by the National Association of

Securities Dealers to be underwriting compensation for

purposes of that Associations Rules of Fair Practice. (Emphasis

added).

54.

The NASD specifically addresses what constitutes underwriting compensation in

NASD Conduct Rule 2710(c)(2)(B) (formerly Article III, Section 44 of the Associations Rules of

Fair Practice):

For purposes of determining the amount of underwriting

compensation, all items of value received or to be received

from any source by the underwriter and related persons which are

deemed to be in connection with or related to the distribution of the

public offering as determined pursuant to subparagraphs (3) and (4)

below shall be included. (Emphasis added).

55.

NASD Conduct Rule 2710(c)(2)(c) specifically requires:

If the underwriting compensation includes items of compensation

in addition to the commission or discount disclosed on the cover

page of the prospectus or similar document, a footnote to the

offering proceeds table on the cover of the prospectus or similar

document shall include a cross-reference to the section on

underwriting or distribution arrangements.

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56.

Contrary to applicable law, the IPO Registration Statement/Prospectus did not set

forth, by footnote or otherwise, the Undisclosed Compensation.

57.

Instead, the IPO Registration Statement/Prospectus misleadingly stated that the

underwriting syndicate would receive as compensation an underwriting discount of $1.05 per

share, or a total of $7,665,000, based on the spread between the per share proceeds to Tibco

($13.95) and the Offering price to the public ($15.00 per share). This disclosure was materially

false and misleading as it misrepresented underwriting compensation by failing to include

Undisclosed Compensation.

58.

In addition, the IPO Registration Statement/Prospectus stated:

Shares sold by the underwriters to the public will initially be

offered at the initial public offering price set forth on the cover of

this prospectus [$15.00]. Any shares sold by the underwriters to

securities dealers may be sold at a discount. . .

59.

The IPO Registration Statement/Prospectus was materially false and misleading in

that in order to receive share allocations from the IPO Underwriter Defendants in the Tibco IPO,

customers were required to pay an amount in excess of the IPO price in the form of Undisclosed

Compensation and/or Tie-in Agreements.

60.

NASD Conduct Rule 2330(f) further prohibits an underwriter from sharing

directly or indirectly in the profits in any account of a customer:

[N]o member or person associated with a member shall share

directly or indirectly in the profits or losses in any account of a

customer carried by the member or any other member.

61.

The IPO Underwriter Defendants scheme was dependent upon customers

obtaining substantial profits by selling share allocations from the IPO and paying a material

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portion of such profits to the IPO Underwriter Defendants. In this regard, the IPO Underwriter

Defendants shared in their customers' profits in violation of NASD Conduct Rule 2330(f).

62.

The failure to disclose the IPO Underwriter Defendants unlawful profit-sharing

arrangement as described herein, rendered the IPO Registration Statement/Prospectus materially

false and misleading.

63.

NASD Conduct Rule 2440 governs Fair Prices and Commissions and, in relevant

part, provides that a member:

shall not charge his customer more than a fair commission or

service charge, taking into consideration all relevant circumstances,

including market conditions with respect to such security at the

time of the transaction, the expense of executing the order and the

value of any service he may have rendered by reason of his

experience in and knowledge of such security and market therefor.

64.

Guideline IM-2440 of the NASD states, in relevant part:

It shall be deemed a violation of . . . Rule 2440 for a member to

enter into any transaction with a customer in any security at any

price not reasonably related to the current market price of the

security or to charge a commission which is not reasonable. A

mark-up of 5% or even less may be considered unfair or

unreasonable under the 5% policy.

65.

The IPO Registration Statement/Prospectus was materially false and misleading

due to its failure to disclose the material fact that the IPO Underwriter Defendants were charging

customers commissions that were unfair, unreasonable, and excessive as consideration for

receiving allocations of shares in the IPO.

MARKET MANIPULATION THROUGH THE USE OF ANALYSTS

66.

As demonstrated in the “Use of Analysts” section of the Master Allegations in

furtherance of their manipulative scheme, IPO Underwriter Defendants Goldman Sachs, Bear

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Stearns, and DB Alex. Brown (Deutsche Bank) improperly used their analysts who suffered from

conflicts of interest, to issue glowing research reports and positive recommendations at or about

the expiration of the quiet period so as to manipulate the Issuer’s aftermarket stock price.

67.

On August 9, 1999, just after the date of the expiration of the "quiet period" with

respect to the Tibco IPO, Defendants Goldman Sachs, Bear Stearns and DB Alex. Brown

(Deutsche Bank) each initiated analyst coverage of Tibco. Goldman Sachs included Tibco on its

“recommended list,” Goldman Sachs’ highest rating. DB Alex. Brown (Deutsche Bank) issued a

strong buy recommendation and Bear Stearns issued a buy recommendation with a 12-month

price target of $38.00 per share.

68.

The price target set forth in the Bear Stearns report was materially false and

misleading as it was based upon a manipulated price.

UNLAWFUL CONDUCT IN CONNECTION WITH THE SECONDARY OFFERING

69.

Consistent with their conduct in other secondary (or add-on) offerings as set forth

herein, the "Secondary Offering Underwriter Defendants" engaged in unlawful practices

described more fully herein in connection with the Secondary Offering.

70.

In this regard, in order for certain customers of DB Alex. Brown (Deutsche Bank),

Bear Stearns, SG Cowen and Goldman Sachs to have received an allocation of stock in the Tibco

IPO or in otherwise unrelated initial public offerings, they were required or induced to purchase

shares of Tibco in the Secondary Offering.

THE SECONDARY OFFERING

71.

On or about March 21, 2000, an additional 5,000,000 shares of Tibco were sold in

the Secondary Offering at $106.00 per share (a dramatic 606% premium above the $15.00 per

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share IPO price) pursuant to the materially false and misleading Secondary Offering Registration

Statement/Prospectus. This price per share of the Secondary Offering reflects a 3-for-1 split of

Tibco common stock on February 22, 2000.

72.

The Secondary Offering Registration Statement/Prospectus stated that "(t)he last

reported sale price for our common stock on March 21, 2000 was $106.00 per share." This

statement was materially false and misleading in that it failed to disclose that the stock’s market

price and the price at which the Secondary Offering was sold to the public were artificially

inflated and the product of a manipulated market. As set forth above, the IPO Underwriter

Defendants had required customers to agree to Tie-in Agreements and/or pay Undisclosed

Compensation, thereby artificially inflating the price of Tibco's common stock in the aftermarket.

73.

Also omitted from disclosure in the Secondary Offering Registration

Statement/Prospectus was the material fact that demand for the Secondary Offering was

artificially inflated. As set forth herein, customers of certain Underwriter Defendants were

required to make purchases of shares in the Secondary Offering in order to receive allocations of

shares in the Tibco IPO and/or other hot initial public offerings underwritten by such Defendants.

74.

As demonstrated in the "Use of Analysts" section of the Master Allegations, in

furtherance of their manipulative scheme, SG Cowen improperly used its analysts, who suffered

from conflicts of interest, to help support the market following the Secondary Offering. On May

12, 2000, SG Cowen initiated coverage with a strong buy recommendation.

THE END OF THE CLASS PERIOD

75.

On December 6, 2000, The Wall Street Journal published an article concerning an

investigation of various improper initial public offering practices.

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DEFENDANTS UNLAWFUL CONDUCT

ARTIFICIALLY INFLATED THE PRICE OF THE ISSUERS STOCK

76.

Defendants conduct alleged herein had the effect of inflating the price of the

Issuers common stock above the price that would have otherwise prevailed in a fair and open

market throughout the Class Period.

VIOLATIONS OF THE SECURITIES ACT

FIRST CLAIM

(AGAINST THE ISSUER, THE INDIVIDUAL DEFENDANTS AND

THE SECONDARY OFFERING UNDERWRITER DEFENDANTS

FOR VIOLATION OF SECTION 11 RELATING TO

THE SECONDARY OFFERING REGISTRATION STATEMENT)

77.

Plaintiffs repeat and reallege the allegations set forth above as if set forth fully

herein, except to the extent that any such allegation may be deemed to sound in fraud.

78.

This Claim is brought pursuant to Section 11 of the Securities Act, 15 U.S.C. §

77k, on behalf of Plaintiffs and other members of the Class who purchased or otherwise acquired

the Issuer's common stock traceable to the Secondary Offering against the Issuer, the Individual

Defendants and the Secondary Offering Underwriter Defendants, and were damaged thereby.

79.

As set forth above, the Secondary Offering Registration Statement, when it

became effective, contained untrue statements of material fact and omitted to state material facts

required to be stated therein or necessary to make the statements therein not misleading.

80.

The Issuer is the registrant for the Secondary Offering shares sold to Plaintiffs and

other members of the Class. The Issuer issued, caused to be issued and participated in the

issuance of materially false and misleading written statements and/or omissions of material facts

to the investing public that were contained in the Secondary Offering Registration Statement.

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81.

Each of the Individual Defendants, either personally or through an attorney-in-

fact, signed the Secondary Offering Registration Statement or was a director or person

performing similar functions for the Issuer at the time of the Secondary Offering.

82.

Each of the Secondary Offering Underwriter Defendants is liable as an

underwriter in connection with the Secondary Offering.

83.

The Defendants named in this Claim are liable to Plaintiffs and other members of

the Class who purchased or otherwise acquired shares of the Issuer's common stock traceable to

the Secondary Offering.

84.

By virtue of the foregoing, Plaintiffs and other members of the Class who

purchased or otherwise acquired the Issuer's common stock traceable to the Secondary Offering

are entitled to damages pursuant to Section 11.

85.

This Claim was brought within one year after discovery of the untrue statements

and omissions in the Secondary Offering Registration Statement, or after such discovery should

have been made by the exercise of reasonable diligence, and within three years after the Issuer's

common stock was first bona fide offered to the public.

SECOND CLAIM

(AGAINST THE INDIVIDUAL DEFENDANTS

FOR VIOLATION OF SECTION 15 RELATING TO

THE SECONDARY OFFERING REGISTRATION STATEMENT)

86.

Plaintiffs repeat and reallege the allegations set forth above in the First Claim as if

set forth fully herein.

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87.

This Claim is brought against the Individual Defendants pursuant to Section 15 of

the Securities Act, 15 U.S.C. § 77o, on behalf of Plaintiffs and other members of the Class who

purchased or otherwise acquired the Issuer's common stock traceable to the Secondary Offering.

88.

The Issuer is liable under Section 11 of the Securities Act as set forth in the First

Claim herein with respect to the Secondary Offering.

89.

Each of the Individual Defendants was a control person of the Issuer with respect

to the Secondary Offering by virtue of that individual's position as a senior executive officer

and/or director of the Issuer.

90.

The Individual Defendants, by virtue of their managerial and/or board positions

with the Company, controlled the Issuer as well as the contents of the Secondary Offering

Registration Statement at the time of the Secondary Offering. Each of the Individual Defendants

was provided with or had unlimited access to copies of the Secondary Offering Registration

Statement and had the ability to either prevent its issuance or cause it to be corrected.

91.

As a result, the Individual Defendants are liable under Section 15 of the Securities

Act for the Issuer's primary violation of Section 11 of the Securities Act.

92.

By virtue of the foregoing, Plaintiffs and other members of the Class who

purchased or otherwise acquired the Issuer's common stock traceable to the Secondary Offering

are entitled to damages against the Individual Defendants.

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VIOLATIONS OF THE EXCHANGE ACT

APPLICABILITY OF PRESUMPTION OF RELIANCE:

FRAUD-ON-THE-MARKET DOCTRINE

93.

Plaintiffs will rely, in part, upon the presumption of reliance established by the

fraud-on-the-market doctrine in that:

(a)

Defendants named under Claims brought pursuant to the Exchange Act

made public misrepresentations or failed to disclose material facts during the Class Period

regarding the Issuer as alleged herein;

(b)

The omissions and misrepresentations were material;

(c)

Following the IPO and continuing throughout the Class Period, the Issuers

stock was traded on a developed national stock exchange, namely the NASDAQ National

Market, which is an open and efficient market;

(d)

The Issuer filed periodic reports with the SEC;

(e)

The Issuer was followed by numerous securities analysts;

(f)

The market rapidly assimilated information about the Issuer which was

publicly available and communicated by the foregoing means and that information was promptly

reflected in the price of the Issuer's common stock; and

(g)

The misrepresentations and omissions and the manipulative conduct

alleged herein would tend to induce a reasonable investor to misjudge the value of the Issuer's

common stock.

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EXCHANGE ACT CLAIMS - THE UNDERWRITER DEFENDANTS

THE UNDERWRITER DEFENDANTS ACTED WITH SCIENTER

94.

As alleged herein, the Underwriter Defendants acted with scienter in that they: (a)

knowingly or recklessly engaged in acts and practices and a course of conduct which had the

effect of artificially inflating the price of the Issuers common stock in the aftermarket; (b)

knowingly or recklessly disregarded that the IPO Registration Statement/Prospectus as set forth

herein was materially false and misleading; (c) knowingly or recklessly disregarded that the

Secondary Offering Registration Statement/Prospectus as set forth herein was materially false

and misleading; and/or (d) knowingly or recklessly misused their analysts in connection with

analyst reports issued in the aftermarket.

95.

In addition, each of the Underwriter Defendants violated the federal securities

laws as they sold the Issuers shares in and/or after the Offerings and/or recommended the Issuers

stock while in possession of material, non-public information, which they failed to disclose.

96.

As evidenced by the public statements of CSFB published by The Wall Street

Journal on or about June 29, 2001, the practices employed by the IPO Underwriter Defendants in

connection with public offerings complained of herein, were widespread throughout the financial

underwriting community. In this regard, CSFB, which recently settled regulatory claims of

misconduct concerning its initial public offering allocation practices, stated during the pendency

of the governments investigation, "[w]e continue to believe our [initial public offering] allocation

policies are consistent with those employed by others in the industry."

97.

Underwriter Defendant Goldman Sachs, as reported in the New York Post on May

13, 2002, directly participated in the misconduct herein alleged. For example, the Post reported

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that, "[a] former hedge fund staffer says he has detailed Goldman Sachs' involvement in IPO

'laddering' schemes to regulators looking into alleged illegal practices in the IPO market during

the tech boom." This former hedge fund staffer reportedly told the SEC that:

Goldman Sachs repeatedly made the allocation of coveted initial

public offering shares a condition of his buying additional shares at

a price to be determined later by Goldman Sachs.

"The more I promised to buy in the aftermarket, the more shares I

could expect to get,"[Nicholas Maier, formerly of Cramer & Co.,

now known as Cramer Berkowitz & Co.] said he was told by a

Goldman Sachs broker. "If I reneged on my aftermarket order, I

could expect to feel the consequences, or be docked on future

allocations"...

Maier told lead SEC investigator for the IPO investigations Tammy

Stark on April 29 that Goldman kept a "book" on each deal that

recorded the price at which Maier should buy more stock.

Maier said that after the three-hour interview, the SEC showed him

one of those books, for Marvell Technology Group, which went

public in June 2000 in an offering led by Goldman Sachs.

"It has a column for aftermarket orders, and in it was listed an

order for the stock from Cramer & Co. for 35 percent above the

opening price..."

98.

The Underwriter Defendants knew from their direct participation in the

manipulation of the IPO, or recklessly disregarded as a result of their experience with other

manipulated offerings as set forth in the “Matrix” section of the Master Allegations, that the

manipulations alleged herein were taking place with respect to the IPO and were not disclosed in

the Registration Statements or Prospectuses issued in connection with the Offerings or elsewhere

during the Class Period.

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99.

As required by NASD Conduct Rule 3010(c), each of the IPO Underwriter

Defendants had in place compliance procedures so as to better inform itself whether it was acting

in the unlawful manner alleged herein.

100. Senior management of each of the Underwriter Defendants had regular access to

and received timely written reports tracking the account activity of each of its customers. By

comparing the ratio of brokerage firm commission income per account with the amount of

dollars invested by such account that received allocations of shares in the IPO, senior

management knew, or was reckless in not knowing, that such commissions were

disproportionately high relative to that customer's total investment and imposed on management

a duty of inquiry as is customary in the industry. Such inquiry would have revealed the illegal

practices described herein. Any failure to conduct such inquiry was, at the very least, reckless

and further demonstrates that the Underwriter Defendants knew or recklessly disregarded the

misconduct alleged herein.

101. Certain of the Underwriter Defendants also had the motive and opportunity to

engage in the wrongful conduct described herein for the following reasons, among others:

(a)

Such conduct increased the likelihood that the Issuer would retain certain

of the IPO Underwriter Defendants to undertake future investment banking services such as

public offerings of equity or debt securities, financial consulting, and possible future acquisitions,

thus permitting the IPO Underwriter Defendants to receive additional fees in connection with

those services. Specifically, in this regard, IPO Underwriter Defendants Goldman Sachs, Bear

Stearns, DB Alex. Brown (Deutsche Bank) and S.G. Cowen, were retained to underwrite the

Secondary Offering. Whereas the IPO resulted in $7,665,000 in disclosed compensation for the

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underwriters, the Secondary Offering provided more than three times that amount, as the

Secondary Offering resulted in $25,175,000 in disclosed compensation for the underwriters. (See

also “Additional Investment Banking Business” section of the Master Allegations).

(b)

Such conduct increased the likelihood of attracting the business of new

issuers for the underwriting of initial and secondary public offerings, as well as debt and

convertible offerings, and related investment banking fees, while simultaneously sustaining

and/or enhancing their reputations as investment banks. (See "Attracting New Investment

Banking Clients" section of the Master Allegations).

(c)

The Undisclosed Compensation of the Underwriter Defendants was

directly proportional to the amount of the aftermarket price increase achieved by the

manipulative scheme as their customers were required to pay a percentage of their profits. The

larger the profits, the greater the payment. (See "Maximizing Undisclosed Compensation"

section of the Master Allegations).

(d)

Certain of the Underwriter Defendants' analysts were motivated to and did

issue favorable recommendations for companies they covered because their compensation was, at

least in part, tied to the amount of investment banking fees received by their respective firms in

connection with financial services provided to such companies. (See "Analyst Compensation"

section of the Master Allegations).

(e)

Certain of the IPO Underwriter Defendants' analysts were further

motivated to and did issue favorable recommendations because they personally owned pre-IPO

stock in companies they were recommending. (See "Personal Investments of Analysts" section of

the Master Allegations).

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THIRD CLAIM

(FOR VIOLATIONS OF SECTION 10(b) AND RULE 10b-5

THEREUNDER AGAINST THE IPO UNDERWRITER DEFENDANTS

BASED UPON DECEPTIVE AND MANIPULATIVE PRACTICES

IN CONNECTION WITH THE IPO)

102. Plaintiffs repeat and reallege the allegations set forth above as though fully set

forth herein at length except for Claims brought pursuant to the Securities Act.

103. This Claim is brought pursuant to Section 10(b) of the Exchange Act and Rule

10b-5 promulgated thereunder, on behalf of Plaintiffs and other members of the Class against the

IPO Underwriter Defendants. This Claim is based upon the deceptive and manipulative practices

of the IPO Underwriter Defendants.

104. During the Class Period, the IPO Underwriter Defendants carried out a plan,

scheme and course of conduct which was intended to and, throughout the Class Period, did: (a)

deceive the investing public, including Plaintiffs and other members of the Class by means of

material misstatements and omissions, as alleged herein; (b) artificially inflate and maintain the

market price and trading volume of the Issuer's common stock; and (c) induce Plaintiffs and other

members of the Class to purchase or otherwise acquire the Issuer's common stock at artificially

inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, the IPO

Underwriter Defendants took the actions set forth herein.

105. The IPO Underwriter Defendants employed devices, schemes, and artifices to

defraud and/or engaged in acts, practices and a course of business which operated as a fraud and

deceit upon the Plaintiffs and other members of the Class in an effort to inflate and artificially

maintain high market prices for the Issuer's common stock in violation of Section 10(b) of the

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Exchange Act and Rule 10b-5. The IPO Underwriter Defendants are sued as primary participants

in the unlawful conduct charged herein.

106. The IPO Underwriter Defendants, individually and in concert, directly and

indirectly, by the use of means or instrumentalities of interstate commerce and/or of the mails,

engaged and participated in a continuous course of conduct to conceal their unlawful practices

and course of business which operated as a fraud and deceit upon Plaintiffs and other members of

the Class.

107. The IPO Underwriter Defendants had actual knowledge of or recklessly

disregarded the existence of the Tie-in Agreements, the requirement that customers pay

Undisclosed Compensation and the manipulations alleged herein.

108. Each of the IPO Underwriter Defendants held itself out as an NASD member and

was required to observe high standards of commercial honor and just and equitable principles of

trade (NASD Conduct Rule 2110). The IPO Underwriter Defendants owed to Plaintiffs and

other members of the Class the duty to conduct the IPO and the trading of the Issuer's common

stock in a fair, efficient and unmanipulated manner.

109. By virtue of the foregoing, the IPO Underwriter Defendants violated Section 10(b)

of the Exchange Act and Rule 10b-5.

110. As a result of the manipulative conduct set forth herein, Plaintiffs and other

members of the Class purchased or otherwise acquired the Issuer's common stock during the

Class Period at artificially inflated prices and were damaged thereby.

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FOURTH CLAIM

(FOR VIOLATIONS OF SECTION 10(b) AND RULE 10b-5

THEREUNDER AGAINST THE SECONDARY OFFERING UNDERWRITER

DEFENDANTS BASED UPON DECEPTIVE PRACTICES

IN CONNECTION WITH THE SECONDARY OFFERING)

111. Plaintiffs repeat and reallege the allegations set forth above as though fully set

forth herein at length except for Claims brought pursuant to the Securities Act.

112. This Claim is brought pursuant to Section 10(b) of the Exchange Act and Rule

10b-5 promulgated thereunder, on behalf of Plaintiffs and other members of the Class who

purchased or otherwise acquired the Issuer's common stock in or after the Secondary Offering

against the Secondary Offering Underwriter Defendants. This Claim is based upon the deceptive

practices of the Secondary Offering Underwriter Defendants.

113. The Secondary Offering Underwriter Defendants carried out a plan, scheme and

course of conduct which was intended to and did: (a) deceive the investing public, including

Plaintiffs and other members of the Class by means of material misstatements and omissions, as

alleged herein; (b) artificially inflate and maintain the market price and trading volume of the

Issuer's common stock; and (c) induce Plaintiffs and other members of the Class to purchase or

otherwise acquire the Issuer's common stock at artificially inflated prices. In furtherance of this

unlawful scheme, plan and course of conduct, the Secondary Offering Underwriter Defendants

took the actions set forth herein.

114. The Secondary Offering Underwriter Defendants employed devices, schemes, and

artifices to defraud and/or engaged in acts, practices and a course of business which operated as a

fraud and deceit upon Plaintiffs and other members of the Class in an effort to artificially inflate

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and maintain high market prices for the Issuer's common stock in violation of Section 10(b) of

the Exchange Act and Rule 10b-5. The Secondary Offering Underwriter Defendants are sued as

primary participants in the unlawful conduct charged herein.

115. The Secondary Offering Underwriter Defendants, individually and in concert,

directly and indirectly, by the use of means or instrumentalities of interstate commerce and/or of

the mails, engaged and participated in a continuous course of conduct to conceal their unlawful

practices and course of business which operated as a fraud and deceit upon Plaintiffs and other

members of the Class.

116. The Secondary Offering Underwriter Defendants had actual knowledge of or

recklessly disregarded the material fact that demand for the Secondary Offering was artificially

inflated, due, in large part, to the requirement of these Defendants that customers could only

obtain allocations in hot initial public offerings by purchasing shares in the Secondary Offering.

117. Each of the Secondary Offering Underwriter Defendants held itself out as an

NASD member and was required to observe high standards of commercial honor and just and

equitable principles of trade (NASD Conduct Rule 2110). The Secondary Offering Underwriter

Defendants owed to Plaintiffs and other members of the Class the duty to conduct the Secondary

Offering and the trading of the Issuer's common stock in a fair, efficient and unmanipulated

manner.

118. By virtue of the foregoing, the Secondary Offering Underwriter Defendants

violated Section 10(b) of the Exchange Act and Rule 10b-5.

119. As a result of the deceptive conduct set forth herein, Plaintiffs and other members

of the Class purchased or otherwise acquired the Issuer's common stock during the Class Period

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without knowledge of the fraud alleged herein at artificially inflated prices and were damaged

thereby.

FIFTH CLAIM

(FOR VIOLATIONS OF SECTION 10(b) AND RULE 10b-5

THEREUNDER AGAINST THE UNDERWRITER DEFENDANTS

BASED UPON MATERIALLY FALSE AND MISLEADING

STATEMENTS AND OMISSIONS OF MATERIAL FACTS)

120. Plaintiffs repeat and reallege the allegations set forth above as though fully set

forth herein at length except for Claims brought pursuant to the Securities Act.

121. This Claim is brought pursuant to Section 10(b) of the Exchange Act and Rule

10b-5 promulgated thereunder, on behalf of Plaintiffs and other members of the Class who

purchased or otherwise acquired the Issuer's common stock during the Class Period against the

Underwriter Defendants. This Claim is based upon materially false and misleading statements

and omissions of material facts.

122. Each of the Underwriter Defendants: (a) employed devices, schemes, and artifices

to defraud; (b) made untrue statements of material fact and/or omitted to state material facts

necessary to make the statements not misleading; and (c) engaged in acts, practices and a course

of business which operated as a fraud and deceit upon Plaintiffs and other members of the Class

in violation of Section 10(b) of the Exchange Act and Rule 10b-5.

123. During the Class Period, the Underwriter Defendants: (a) deceived the investing

public, including Plaintiffs and other members of the Class, as alleged herein; (b) artificially

inflated and maintained the market price of and demand for the Issuer's common stock; and (c)

induced Plaintiffs and other members of Class to purchase or otherwise acquire the Issuer's stock

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at artificially inflated prices. In furtherance of this unlawful course of conduct, the Underwriter

Defendants took the actions set forth herein.

124. The Underwriter Defendants, directly and indirectly, by the use of means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal material information as set forth more particularly

herein, and engaged in transactions, practices and a course of business which operated as a fraud

and deceit upon Plaintiffs and other members of the Class.

125. The Underwriter Defendants, either directly or through their designated

representatives, prepared and reviewed the IPO Registration Statement/ Prospectus and/or the

Secondary Offering Registration Statement/Prospectus for those Offerings in which they served

as underwriters. In addition, the Underwriter Defendants had access to drafts of said documents

prior to their filing with the SEC and the dissemination to the public.

126. The material misrepresentations and/or omissions were made knowingly or

recklessly and for the purpose and effect of, inter alia: (a) securing and concealing the Tie-in

Agreements; (b) securing and concealing the Undisclosed Compensation; (c) concealing that the

price and demand for the Secondary Offering was artificially inflated; and/or (d) concealing that

certain of the Underwriter Defendants and their analysts who reported on the Issuer's stock had

material conflicts of interest.

127. As a result of making affirmative statements in the IPO Registration

Statement/Prospectus, the Secondary Offering Registration Statement/Prospectus or otherwise, or

participating in the making of such affirmative statements, the Underwriter Defendants had a

duty to speak fully and truthfully regarding such representations and to promptly disseminate any

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other information necessary to make the statements made, in the light of the circumstances in

which they were made, not misleading.

128. The Underwriter Defendants also had a duty to disclose the material, non-public

information complained of herein or to abstain from selling the Issuer's common stock in the

IPO, the Secondary Offering, and/or trading or recommending the Issuer's stock in the

aftermarket while in possession of such information.

129. By reason of the foregoing, the Underwriter Defendants violated Section 10(b) of

the Exchange Act and Rule 10b-5 promulgated thereunder.

130. As a result of the dissemination of materially false and misleading information

described above, Plaintiffs and other members of the Class purchased or otherwise acquired the

Issuer's common stock during the Class Period without knowledge of the fraud alleged herein at

artificially inflated prices and were damaged thereby.

EXCHANGE ACT CLAIMS - THE ISSUER DEFENDANTS

THE ISSUER DEFENDANTS ACTED WITH SCIENTER

131. As alleged herein, the Issuer Defendants acted with scienter in that they: (a)

knowingly or recklessly engaged in acts and practices and a course of conduct which had the

effect of artificially inflating the price of the Issuer's common stock in the aftermarket; (b)

knowingly or recklessly disregarded that the IPO Registration Statement/Prospectus as set forth

herein was materially false and misleading; (c) knowingly or recklessly disregarded that the

Secondary Offering Registration Statement/Prospectus as set forth herein was materially false

and misleading; and/or (d) knowingly or recklessly disregarded the misconduct of the

Underwriter Defendants alleged herein.

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132. The Issuer Defendants had numerous interactions and contacts with the IPO

Underwriter Defendants prior to the IPO from which they knew or recklessly disregarded that the

manipulative and deceptive scheme described herein had taken place.

133. In this regard, the IPO Underwriter Defendants provided detailed presentations to

the Issuer Defendants regarding the registration process leading up to the IPO and the expected

price performance in aftermarket trading based upon previous companies taken public by these

underwriters. In addition, the IPO Underwriter Defendants explained the process by which the

Issuer Defendants could utilize the Issuer's publicly traded stock as currency in stock-based

acquisitions, the analyst coverage they would provide for the Issuer upon the successful

completion of the IPO and the effect that such positive coverage would have on the aftermarket

price of the Issuer's stock. Such presentation also included a discussion of the potential for

secondary or add-on offerings.

134. Once the Issuer Defendants had determined to retain the IPO Underwriter

Defendants with respect to the Issuer's initial public offering, the Issuer Defendants worked

closely with the IPO Underwriter Defendants in preparing the IPO Registration

Statement/Prospectus, as well as generating interest in the IPO by speaking with various, but

selected groups of investors.

135. During the course of these presentations, known as "Road Shows," the Issuer

Defendants learned of or recklessly disregarded the misconduct described herein. In this regard,

the Chief Executive Officer, the Chief Financial Officer and/or other high-ranking Issuer

employees worked side by side with representatives of the IPO Underwriter Defendants while

visiting with several potential investors in a given city on a daily basis over a two-to-three week

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period to promote interest in the IPO. These presentations were all scheduled by and attended by

representatives of the IPO Underwriter Defendants.

136. As a result of the close interaction between the Issuer Defendants and the IPO

Underwriter Defendants, the Issuer Defendants learned of, became aware of or recklessly

disregarded the misconduct described herein. (See “Issuer Defendants” section of the Master

Allegations).

137. The Issuer Defendants also had the motive and opportunity to engage in the

wrongful conduct described herein for, among others, the following reasons:

(a)

The Individual Defendants beneficially owned substantial amounts of the

Issuer's common stock. For example, as of the IPO, Defendant Ranadive owned 4,058,125

shares, Defendant Hansen owned 120,000 shares, Defendant Dalal owned 2,877,983 shares,

Defendant Kozel owned 4,398,333 shares, Defendant Listwin owned 4,365,000 shares,

Defendant Sonsini owned 33,333 shares, and Defendant White owned 135,832 shares. These

holdings, which were purchased or otherwise acquired at prices below the IPO price,

substantially increased in value as a result of the misconduct alleged herein.

(b)

With such holdings, the Issuer Defendants were motivated by the fact that

the artificially inflated price of the Issuer's shares in the aftermarket would enable Individual

Defendants to sell personal holdings in the Issuer's securities at artificially inflated prices in the

aftermarket or otherwise. In this regard, on March 21, 2000, the Issuer effected a Secondary

Offering in which 5,000,000 shares were sold by the Issuer at $106 per share generating net

proceeds of $400 million. The Issuer Defendants were able to dump their shares at this inflated

price in this Secondary Offering as follows:

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Name

Shares Offered

Proceeds

Hansen

100,000

$ 10,096,500

Dalal

10,000

$ 1,009,650

Kozel

12,000

$ 1,211,580

White

100,000

$ 10,096,500

In addition to shares they sold in the Secondary Offering, the Individual Defendants also sold

their stock in the aftermarket as follows:

Name

Date Range

Shares

Proceeds

Ranadive

07/06/00-07/12/00

1,500,000

over $171 million

Hansen

01/25/00-06/07/01

835,996

over $9 million

Dalal

03/21/00-05/04/01

528,396

over $13 million

Kozel

03/21/00

12,000

over $1 million

White

03/21/00-01/30/01

437,300

over $40 million

(c)

The Issuer Defendants were further motivated by the fact that the Issuer's

artificially inflated stock price could be utilized as currency in negotiating and/or consummating

stock-based acquisitions after the IPO. In this regard, the Issuer acquired Extensibility, Inc. on

September 6, 2000 for 936,400 shares of the Issuer's stock.

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SIXTH CLAIM

(FOR VIOLATIONS OF SECTION 10(b) AND RULE 10b-5

THEREUNDER AGAINST THE ISSUER DEFENDANTS

BASED UPON MATERIALLY FALSE AND MISLEADING STATEMENTS

AND OMISSIONS OF MATERIAL FACTS)

138. Plaintiffs repeat and reallege the allegations set forth above as though fully set

forth herein at length except for Claims brought pursuant to the Securities Act.

139. This Claim is brought pursuant to Section 10(b) of the Exchange Act and Rule

10b-5 promulgated thereunder, on behalf of Plaintiffs and other members of the Class against the

Issuer Defendants. This Claim is based upon materially false and misleading statements and

omissions of material facts made by the Issuer Defendants during the Class Period.

140. The Issuer Defendants: (a) employed devices, schemes, and artifices to defraud;

(b) made untrue statements of material fact and/or omitted to state material facts necessary to

make the statements not misleading; and (c) engaged in acts, practices and a course of business

which operated as a fraud and deceit upon Plaintiffs and other members of the Class in violation

of Section 10(b) of the Exchange Act and Rule 10b-5.

141. During the Class Period, the Issuer Defendants carried out a plan, scheme and

course of conduct which was intended to and, throughout the Class Period, did: (a) deceive the

investing public, including Plaintiffs and other members of the Class, as alleged herein; (b)

artificially inflate and maintain the market price of and demand for the Issuer's common stock;

and (c) induce Plaintiffs and other members of the Class to acquire the Issuer's common stock at

artificially inflated prices. In furtherance of this unlawful course of conduct, the Issuer and the

Individual Defendants took the actions set forth herein.

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142. The Issuer Defendants, directly and indirectly, by the use of means or

instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal material information as set forth more particularly

herein, and engaged in transactions, practices and a course of business which operated as a fraud

and deceit upon Plaintiffs and other members of the Class.

143. The Issuer Defendants prepared and reviewed documents alleged to contain the

materially false and misleading statements and/or omissions complained of herein. In addition,

the Issuer Defendants had access to drafts of these documents prior to their filing with the SEC

and dissemination to the public.

144. The material misrepresentations and/or omissions were made knowingly or

recklessly and for the purpose and effect of concealing that the Underwriter Defendants had

engaged in the manipulative and deceptive scheme alleged herein and that the Issuer Defendants

would benefit financially as a result of said scheme.

145. As a result of making such affirmative statements, or participating in the making

of such affirmative statements, the Issuer Defendants had a duty to speak fully and truthfully

regarding such representations and to promptly disseminate any other information necessary to

make the statements made, in the light of the circumstances in which they were made, not

misleading.

146. By reason of the foregoing, the Issuer Defendants violated Section 10(b) of the

Exchange Act and Rule 10b-5 promulgated thereunder.

147. As a result of the dissemination of materially false and misleading information

described above, Plaintiffs and other members of the Class purchased or otherwise acquired the

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Issuer's common stock during the Class Period without knowledge of the fraud alleged herein at

artificially inflated prices and were damaged thereby.

SEVENTH CLAIM

(FOR VIOLATIONS OF SECTION 20(a)

AGAINST THE INDIVIDUAL DEFENDANTS BASED

UPON MATERIALLY FALSE AND MISLEADING STATEMENTS

AND OMISSIONS OF MATERIAL FACTS)

148. Plaintiffs repeat and reallege the allegations set forth above as though fully set

forth herein at length except for Claims brought pursuant to the Securities Act.

149. The Individual Defendants acted as controlling persons of the Issuer within the

meaning of Section 20(a) of the Exchange Act as alleged herein and culpably participated in the

wrongdoing. By virtue of their high-level positions, and their ownership and contractual rights,

participation in and/or awareness of the Issuer's operations and/or intimate knowledge of the

underwriting of the IPO, the Individual Defendants had the power to influence and control and

did influence and control, directly or indirectly, the decision-making of the Issuer, including the

content and dissemination of various documents that contain the materially false and misleading

statements and/or omissions complained of herein. The Individual Defendants were provided

with or had unlimited access to copies of these documents prior to or shortly after they were filed

with the SEC and/or disseminated to the public and had the ability to prevent their filing and/or

dissemination or cause the documents to be corrected.

150. Each of these Individual Defendants had direct and supervisory involvement in

the day-to-day operations of the Issuer and, therefore, is presumed to have had the power to

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control or influence the particular transactions giving rise to the securities violations herein, and

exercise the same.

151. By virtue of their positions as controlling persons of the Issuer, the Individual

Defendants are liable pursuant to Section 20(a) of the Exchange Act. As a direct and proximate

result of this wrongful conduct, Plaintiffs and other members of the Class were damaged thereby.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs, individually and on behalf of the Class, pray for

judgment as follows:

A.

Declaring this action to be a class action pursuant to Rule 23(a) and (b)(3) of the

Federal Rules of Civil Procedure and certifying Plaintiffs as representatives of the Class and

counsel as class counsel;

B.

Awarding damages to Plaintiffs and the Class;

C.

Awarding Plaintiffs and the Class prejudgment and post-judgment interest, as well

as reasonable attorneys' and experts' witness fees and other costs; and

D.

Awarding such other and further relief as this Court may deem just and proper.

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JURY DEMAND

Plaintiffs demand a trial by jury.

DATED: June 6, 2002

MILBERG WEISS BERSHAD HYNES

& LERACH LLP

By:_______________________________

Melvyn I. Weiss (MW-1392)

Ariana J. Tadler (AJT-0452)

Peter G.A. Safirstein (PS-6176)

One Pennsylvania Plaza

New York, New York 10119-0165

(212) 594-5300

BERNSTEIN LIEBHARD & LIFSHITZ,

LLP

By:_________________________________

Stanley D. Bernstein (SB-1644)

Robert Berg (RB-8542)

Rebecca M. Katz (RK-1893)

Danielle Mazzini-Daly (6087)

10 East 40th Street

New York, New York 10016

(212) 779-1414

SCHIFFRIN & BARROWAY, LLP

Richard S. Schiffrin

David Kessler

Darren J. Check

Three Bala Plaza East, Suite 400

Bala Cynwyd, Pennsylvania 19004

(610) 667-7706

STULL STULL & BRODY

Jules Brody (JB-9151)

Aaron Brody (AB-5850)

6 East 45th Street

New York, New York 10017

(212) 687-7230

WOLF HALDENSTEIN ADLER

FREEMAN & HERZ LLP

Daniel W. Krasner (DK-6381)

Fred Taylor Isquith (FI-6782)

Thomas H. Burt (TB-7601)

Brian Cohen (2091)

270 Madison Avenue

New York, New York 10016

(212) 545-4600

SIROTA & SIROTA LLP

Howard Sirota (HBS-5925)

Rachell Sirota (RS-5831)

Saul Roffe (SR-2108)

John P. Smyth (JPS-3206)

Halona N. Patrick (HNP-5803)

110 Wall Street, 21st Floor

New York, New York 10005

(212) 425-9055

Plaintiffs' Executive Committee

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