SOURCE: Federman & Sherwood

August 14, 2009 13:12 ET

Federman & Sherwood Files First Securities Class Action Lawsuit Against MIND C.T.I., Ltd. (NASDAQ: MNDO)

OKLAHOMA CITY, OK--(Marketwire - August 14, 2009) - On August 13, 2009, Federman & Sherwood filed the first class action lawsuit in the United States District Court for the Southern District of New York against MIND C.T.I., Ltd. (NASDAQ: MNDO). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, as more specifically set forth below. The class period is from June 8, 2006 through February 27, 2008.

Plaintiff's Complaint alleges that Defendants' material omissions and dissemination of materially false and misleading statements concerning the Company's financial condition, cash management and internal controls caused the Company's stock price to become artificially inflated, inflicting damages on investors. MIND engages in the development, manufacture and marketing of billing and customer care software and the sale of related services for various types of communication providers, including traditional cable and wireless, Internet protocol or VOIP and broadband IP network operators. The Complaint alleges that Defendants knew or recklessly disregarded and concealed from the investing public that: (a) most of MIND's reported cash position comprised illiquid Auction Rate Securities ("ARSs"), and (b) internal controls over the monitoring, accounting and reporting of the Company's investment in cash equivalents and\or short-term investments were materially deficient.

The Complaint further alleges that Defendants misrepresented the Company's liquidity and its ability to attract customers, finance current operations, and pursue strategic acquisitions. In a Form 20-F filed with the SEC, Defendants later admitted that because "the stated maturity of these securities is 2046" and "there is currently a very limited market for these auction rate securities... this situation leaves us with limited cash resources with which to pursue our acquisition strategy." Defendants ultimately restated the Company's financial statements for 2006, and disclosed that almost $23 million of the Company's originally reported $27 million liquid cash position was invested in highly illiquid ARSs. Defendants also admitted that, "In connection with restatement, management determined that a material weakness in internal control over financial reporting existed as of December 31, 2006 because at that time we did not have effective controls designed and in place to ensure that our investments were classified in accordance with generally accepted accounting principles."

Plaintiff seeks to recover damages on behalf of the Class. If you are a member of the Class as described above, you may move the Court no later than Monday, October 12, 2009, to serve as a lead plaintiff for the Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995. A copy of the Complaint is available from the Court or from Federman & Sherwood. If you wish to discuss this action, participate in this or any other lawsuit, or have any questions or concerns regarding this notice, or preservation of your rights, please contact:

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