VMware’s former CEO accused of making false and misleading statements concerning the company’s business

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Diane Greene, the former VMware CEO that was suddenly fired in July 2008, is now being accused of the violation of the Securities Exchange Act of 1934 and the breach of her fiduciary duties by making and/or allowing false and misleading statements concerning the company’s business, operations and prospects.

This is the class-action lawsuit that Holzer Holzer & Fistel LLC is filing against Green and Mark Peek (the VMware’s CFO coming from Amazon).

The extended description is even more interesting:

The defendants allegedly knew but recklessly disregarded and failed to disclose to the investing public that: (i) the Company was facing increasing competition and lower-priced rival products were lengthening the time it took for VMware to close deals; (ii) customers were taking longer to sign lucrative multi-year enterprise license agreements, and were instead signing smaller, short-term contracts; and (iii) as a result of the foregoing, defendants misrepresented the Company’s business and future prospects. The complaint further charges that, during the Class Period, Company insiders took advantage of the undisclosed adverse information by collectively selling 86,541 shares of their personally held VMware common stock for gross proceeds in excess of $5.8 million.

It’s a funny coincidence that this lawsuit is being arranged right now that Diane Greene is rumored to be back in the virtualization industry with a new startup.