Ixia gets noncompliance letter from Nasdaq, faces investor lawsuit

Ixia's legal and financial tangles continue to mount as the test and measurement company received a noncompliance notice from the Nasdaq stock exchange because of its delay in filing its Quarterly Report on Form 10-Q for the quarter ended Sept. 30.

This news follows the resignation of the vendor's President and CEO Victor Alston.

Alston stepped down from his post in late October after the company's audit committee determined that he misstated part his academic credentials, age and early employment history.

Ixia said in a 12b-25 Notification of Late Filing with the SEC on Nov. 13 that it "is conducting an email review and performing additional procedures to ensure the accuracy of its financial information and appropriateness of its financial reporting."

The vendor said it will submit a plan to Nasdaq to regain compliance with the stock exchange's listing rules within 60 days, or by Jan. 18, 2014.

In related news, The Shareholders Foundation announced on Monday they filed a lawsuit against the vendor on the behalf of investors that purchased Ixia common stock. The suit alleges that the vendor violated federal securities laws in connection with certain false and misleading statements made between April 29, 2010 and Oct. 24, 2013.

"The plaintiff alleges that the defendants made false and/or misleading statements and/or failed to disclose that Ixia improperly recognized revenues related to its warranty and software maintenance contracts, that Ixia's Chief Executive Officer ... misstated his academic credentials and employment history, that Ixia lacked adequate internal and financial controls, and that as a result of the foregoing, Ixia's statements were materially false and misleading at all relevant times," The Shareholders Foundation wrote in their suit.

During the third quarter, the vendor reported total revenue grew to $115.4 million, up from $110.6 million in Q3 2012.

For more:
- see the Nasdaq release
- and the shareholder release

Related articles:
Ixia deepens network app visibility, enterprise capabilities with Net Optics acquisition
Ixia CEO Alston resigns over misstated academic credentials
Ixia acquires BreakingPoint Systems for $160M, bolsters security testing power