The lawsuit was filed on behalf of purchasers of STEC, Inc. ("STEC" or the "Company") (NASDAQ: STEC) common stock during the period between June 16, 2009 and November 3, 2009.

The complaint alleges that during the class period, defendants represented that STEC was effectively growing its business and that the growth would continue. Such statements presented the Company's historical results, its customers, its competitive position and its prospects, in a very favorable light, causing the Company's stock to trade at inflated levels. As alleged, such statements were materially false and misleading because, contrary to the picture painted by defendants and assurances to investors that STEC had no competition at that stage, the Company was facing looming threats of competition from other high technology companies. Defendants further assured investors that enterprise end users were quickly adopting solid state drive ("SSD") devices over traditional hard disk drive ("HDD") devices. The complaint alleges that as a result of defendants' false and misleading statements, STEC stock traded at artificially inflated prices during the Class Period, reaching a high of $41.84 per share on September 10, 2009. This inflated stock price permitted top STEC officers/directors to sell 9 million shares of their STEC stock at inflated prices in a secondary stock offering in August 2009.

On November 3, 2009, STEC shocked investors when it reported its third quarter 2009 financial results and its fourth quarter 2009 outlook, announcing an inventory warning that one of its customers would carry 2009 inventory into 2010, impacting the Company's first quarter 2010. STEC identified the customer as EMC Corporation, a company which accounts for 90% of the Company's Zeus IOPS SSD business. On this news, STEC's stock plummeted $9.01 per share to close at $14.14 per share on November 4, 2009, a one-day decline of over 38%, on unusually high volume of more than 31.9 million shares.