The two law firms, Cauley Geller Bowman & Rudman and Schiffrin & Barroway, filed the action on behalf of investors who purchased Printcafes common stock between 18 June and 22 October 2002.

The complaint alleged that the company violated portions of the Securities Act of 1933.
A statement issued by Printcafe said: We believe the lawsuit is without merit and we intend to vigorously defend against it.

In particular, the complaint alleged that the registration statement and prospectus were materially false and misleading, because they failed to disclose several problems the company was having at the time.

It claimed that Printcafe failed to report that demand for its product and services was declining, and that development efforts were experiencing difficulties.

In addition the complaint alleged that Printcafe failed to tell potential investors that its performance was well below internal expectations, and the company was about to undertake a restructuring of its operations to reverse the trend.

President and chief executive, Marc Olin, and chief financial officer and chief operating officer Joseph Whang have both been named as defendants in the complaint.

Printcafe entered into a merger agreement with Electronics For Imaging (EFI) earlier this year, after Creo decided to walk away from the deal (PrintWeek, 28 February).

Printcafe has informed us of the suit, and we have not changed our plans for the merger as a result of this complaint, said EFI chief financial officer Joe Cutts.

Story by Andy Scott