A federal court has ruled that investors are accusing VMware Inc. executives of insider trading and manipulation of revenue accounting. The investors claim that VMware deceived shareholders by falsely assuring them it would meet revenue targets in fiscal 2019 and 2020. The lawsuit alleges that the executives used this information to benefit a group of shareholders. VMware did not contest the investors’ motion for a class action, allowing the case to proceed as a potentially large lawsuit representing investors who may have suffered losses. The specific allegations include that VMware executives made false and misleading statements about the company’s revenue performance, leading to an artificial inflation of its stock price. The executives are accused of selling their own shares and profiting from the subsequent decline in the stock price after the true financial situation was revealed. This ruling marks at least the second recent instance of an uncontested class action motion in securities cases, highlighting the seriousness of the accusations against VMware.
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