complaint - class action v. 1 . plaintiff, thomas samuel...

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IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANI A THOMAS SAMUEL , on behalf of himself and all others similarly situated, COMPLAINT - CLASS ACTIO N Plaintiff , V . CASE NO . : ASTEA INTERNATIONAL INC ., ZACK BERGREEN, and FREDRIC ETSKOVITZ , Defendants . JURY TRIAL DEMANDE D 1 . Plaintiff, Thomas Samuel ("Plaintiff '), alleges the following for his Complaint i n the above-captioned matter, individually and on behalf of all persons and entities (the "Class" ) who purchased or otherwise acquired the common stock of Astea International Inc . ("Astea" o r the "Company") between May 11, 2005 to March 31, 2006, inclusive (the "Class Period" ) NATURE OF THE ACTIO N 2 . This is a class action on behalf of all purchasers of the common stock of Aste a between May 11, 2005 to March 31, 2006, inclusive , pursu an t to the Securities Exchange Act o f 1934 (the "Exchange Act") . 3 . Based in Horsham, Pennsylvania, Astea engages in the development and marketin g of service management software solutions, which are licensed to companies that sell and servic e equipment, and/or sell and deliver professional services worldwide . The Company also provide s consulting, training, and support services to implement its products . The Company was founded

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Page 1: COMPLAINT - CLASS ACTION V. 1 . Plaintiff, Thomas Samuel ...securities.stanford.edu/filings-documents/1035/... · Form 8-K containing the press release and signed by Etskovitz was

IN THE UNITED STATES DISTRICT COURTFOR THE EASTERN DISTRICT OF PENNSYLVANIA

THOMAS SAMUEL , on behalf ofhimself and all others similarly situated,

COMPLAINT - CLASS ACTIO N

Plaintiff,

V .CASE NO . :

ASTEA INTERNATIONAL INC ., ZACK

BERGREEN, and FREDRIC ETSKOVITZ ,

Defendants .JURY TRIAL DEMANDED

1 . Plaintiff, Thomas Samuel ("Plaintiff '), alleges the following for his Complaint in

the above-captioned matter, individually and on behalf of all persons and entities (the "Class" )

who purchased or otherwise acquired the common stock of Astea International Inc . ("Astea" or

the "Company") between May 11, 2005 to March 31, 2006, inclusive (the "Class Period")

NATURE OF THE ACTIO N

2. This is a class action on behalf of all purchasers of the common stock of Aste a

between May 11, 2005 to March 31, 2006, inclusive , pursuan t to the Securities Exchange Act o f

1934 (the "Exchange Act") .

3 . Based in Horsham, Pennsylvania, Astea engages in the development and marketing

of service management software solutions, which are licensed to companies that sell and servic e

equipment, and/or sell and deliver professional services worldwide . The Company also provides

consulting, training, and support services to implement its products . The Company was founded

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in 1979 as Applied System Technologies, Inc . and changed its name to Astea International, Inc .

in 1992.

4. Throughout the Class Period, the Defendants materially overstated and exaggerate d

Astea's financial health . In part icular, Defendants failed to accurately account for the Company's

software development costs pursuant to Generally Accepted Accounting Principles ("GAAP") .

As a result , the Company overstated its earnings by failing to comply with GAAP in recording its

expenses . On March 31 , 2006, the last day of the Class Period, the Company announced that it

would have to restate its financial figures for the three quarters ended September 30, 2005, in

order to adjust for the improper accounting .

5. On March 31, 2006, on news of the restatement, the Company's stock dropped fro m

$16.50 to $11 .73, a loss of nearly 30% in a single day, on heavy trading . The stock had traded

during the Class Period as high as $25 .71 . Consequently, investors have lost millions of dollar s

as a result of the acts and omissions complained of herein .

JURISDICTION AND VENUE

6. This Court has jurisdiction over this action pursuant to Section 27 of the Exchang e

Act, 15 U.S .C. § 78aa, and 28 U .S.C. §§ 1331 and 1337 .

7 . This action arises under and pursuant to 15 U.S.C. § 78j(b), Rule lOb-5

promulgated thereunder , 17 C.F .R. § 240.10b-5 and Section 20(a) of the Exchange Act, 1 5

U.S.C. § 78t(a) .

8. Venue is proper in this District pursuant to Section 27 of the Exchange Act, 1 5

U.S .C . § 78aa.

9 . In furtherance of and in connection with the acts alleged herein, Defendants (a s

defined below), directly or indirectly, used the means and instrumentalities of interstat e

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commerce, including, but not limited to, the mails, interstate telephone communications, th e

Internet, and the facilities of the NASDAQ , a national securities exchange .

PARTIES

10. Plaintiff, Thomas Samuel, purchased the Company's securities during the Clas s

Period, as set forth in the attached Certification, and was damaged thereby .

11 . Defendant Astea Inte rnational Inc. ("Astea" or the "Company") is a corporation

organized under the laws of the state of Delaware . It maintains its principal place of business at

240 Gibraltar Road, Horsham, Pennsylvania 19044 . Astea common stock trades on the

NASDAQ, a national securities exchange .

12 . At all relevant times, Defendant Zack Bergreen ("Bergreen") was Chairman an d

Chief Executive Officer of the Company .

13 . At all relevant times, Defendant Fredric Etskovitz ("Etskovitz") was Chief Financia l

Officer of the Company .

14. Astea, Bergreen and Etskovitz are sometimes collectively referred to a s

"Defendants" .

SUBSTANTIVE ALLEGATIONS

15 . Beginning on May 11, 2005 , and continuing throughout the Class Period unti l

March 31, 2006, the Defendants made statements to the public and filed reports with the SEC

that were materially false and misleading. Specifically, throughout the Class Period, th e

Defendants understated expenses and overstated earnings which served to artificially inflate th e

value of the Company's stock . As a result of these false and misleading statements, the Compan y

was forced to restate its earnings for first three quarters of 2005 .

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False And Misleading Class Period Statements And Omission s

16 . The Class Period begins on May 11, 2005, when the Company filed with the SEC ,

on a Form 10-Q signed by Defendants Bergreen and Etskovitz, its financial results for the firs t

quarter ending March 31, 2005 . In a press release issued that same day, and filed with the SE C

on Form 8-K and signed by Defendant Etskovitz, the Company stated :

For the first quarter ended March 31, 2005, Astea reported revenues of $3 .8million compared to revenues of $5 .9 million for the same period in 2004 . Netloss for the first quarter was $618,000 or $ .21 per share, compared to a net profitof $1 .5 million or $ .51 per share for the same period in 2004. License revenueswere $ .6 million compared to $2 .9 million in 2004 . Total service and maintenancerevenue increased 6% to $3 .2 million, resulting from increased services andmaintenance from the Company's Astea Alliance products . International resultswere strong, with overall revenue of $2 million, a 35% increase over the sameperiod in 2004 .

The overall decline that Astea experienced this quarter was mainly attributed to anumber of deals being delayed, which contributed to the softness in licenserevenues . Additionally, Astea is engaged in a number of larger, enterprise dealsthat traditionally have longer sales cycles, but which are expected to ultimatelyaccount for greater overall revenues . While Astea feels that this focus will have apositive financial impact on the overall year's results, such focus may result inunevenness in quarterly license revenue . Despite the overall revenue decline in thefirst quarter, Astea has had much success in Japan, Australia, and Europe andremains a strong contender in the service lifecycle management market .

"The enterprise deals that we are engaging in are inherently, by the nature of theirsize, more variable and dynamic, therefore making it more difficult to predict anyone quarter's results . We remain confident in our ability to achieve our revenuegoals for 2005 based on our strong pipeline and the number of companies we arecurrently tracking," stated Zack Bergreen, CEO and President of AsteaInternational . "We continue to see increased traction with Astea Alliance becausewe incorporate best practices and solve our customers' business problems with thebest ROI, while simultaneously providing them with a competitive advantage . Wehave a solid product and one that is recognized by leading companies as havingthe breadth and depth necessary for them to compete in today's global competitiveenvironment . "

17. On August 10, 2005, the Company filed with the SEC, on a Form 10 -Q signed by

Defendants Bergreen and Etskovitz, its financial results for the second quarter ending June 30 ,

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2005 . In a press release issued that same day, and filed with the SEC on Form 8-K and signed b y

Defendant Etskovitz, the Company stated :

For the second quarter ended June 30, 2005, Astea reported revenues of $5 .3million, a 21% increase compared to revenues of $4 .4 million for the same periodin 2004. Net profit for the second quarter was $650,000 or $ .22 per share,compared to $309,000 or $.11 per share for the same period in 2004 . Licenserevenues were up 29% to $2 million compared to $1 .6 million for the same periodin 2004. Total service and maintenance revenues increased 17% to $3 .3 millioncompared to $2 .8 million for the same period in 2004 .

"Clearly, we are very pleased with our results in the second quarter and that wehave translated our effort into a profitable position . Our cash position remainsstrong and we continue to invest in our products, and develop strongerrelationships with both existing and new customers," said Zack Bergreen,President and CEO of Astea International. "The continued interest in ourcomprehensive solution, in conjunction with the accelerated activity in the ServiceLifecycle Management space, puts us in a favorable position for today and in thefuture . "

In the second quarter, Astea launched their Service Impact Assessment (SIA)offering. The SIA is a fast-track approach to identify and quantify the financialand operational impact that a service management solution can have on acompany's operations . Leveraging their proven methodology and their twenty fiveyears in service management, Astea will help companies identify ways to increasetheir profitable revenue, decrease costs, and positively impact cash flow, financialmetrics, and bottom line by optimizing the processes, technology and humancapital within their service organization.

"It has become evident that Astea is emerging as one of the few vendors thatoffers a full range of software and services across the service managementlifecycle," states Bergreen. "Our deep product functionality, proven success, anddomain expertise makes us well positioned to help companies take their serviceoperations to the next level ."

18 . After the market closed on November 14, 2005, the Company filed with the SEC o n

Form 10-Q its financial results for the third quarter ending September 30, 2005 . That filing wa s

signed by Defendants Bergreen and Etskovitz .

19. On November 15, 2005 the Company issued a press release announcing it s

financial results for the Company's third quarter ending September 30, 2005 . The Company' s

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Form 8-K containing the press release and signed by Etskovitz was filed that same day . The

press release stated in relevant part :

For the third quarter ended September 30, 2005, Astea reported revenues of $8 .2million, a 106% increase compared to revenues of $4 million for the same periodin 2004. Net profit for the second quarter was $2 .7 million or $ .91 per share,compared to $155,000 or $ .05 per share for the same period in 2004 . Licenserevenues were up 306% to $4 .8 million compared to $1 .2 million for the sameperiod in 2004 . Total service and maintenance revenues increased 22% to $3.4million compared to $2 .8 million for the same period in 2004 . International resultswere strong, with overall revenue of $5 .6 million, a 266% increase over the sameperiod in 2004 .

"The third quarter was a very successful and eventful quarter for Astea. Not onlydid we continue to achieve strong financial and operational results, but we alsocompleted the acquisition of FieldCentrix, a leading mobility solution provider .This acquisition immediately strengthens and further cements Astea's standing asthe only company that can provide an end-to-end enterprise solution thataddresses every facet of the Service Lifecycle Management process, with nowdramatically enhanced mobile capabilities" said Zack Bergreen, Chairman andCEO of Astea International . "As consolidation in our market continues and thecompetitive landscape continuously shifts, we have been able to not only maintainbut thrive in this enviromnent. We hold a very strong cash position and haveabsolutely no debt, which, is not common in the software industry today . Ourresults reflect our ongoing success and commitment in meeting the needs ofleading organizations, worldwide, for our highly sophisticated and proven servicelifecycle management solution . "

20. The financial statements for the quarter ended September 30, 2005, incorporated th e

financial results of the nine months ended September 30, 2005 . On news of this announcement ,

the Company's stock price went from a closing price of $9 .15 on November 14, to a closin g

price of $12 .84 on November 15, a single day increase of nearly 40% .

21 . The statements listed above were false and misleading because they did not compl y

with GAAP when issued .

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The Truth Emerge s

22. On March 31, 2006 the Company issued a press release that was filed with the SEC

on a Form 8-K, signed by Defendant Etskovitz, that reported the Company's fourth quarter and

year end 2005 results . In that release, the Company explained that it had failed to properl y

account for certain transactions during the first three quarters of 2005 and that its prior financia l

filings covering that period were false :

On March 29, 2006, the Company concluded that it had overcapitalized softwarein the first three fiscal quarters of 2005 . The net impact of the quarterlyrestatements was an aggregate charge to earnings of $251,000, which amounts to($ .08) per share. The impact on quarterly earnings per share was a decrease to thefirst quarter of 2005 by $ .04 to ($ .25) per share, a decrease to the second quarterof 2005 by $ .07 to $ .15 per share, and an increase to the third quarter of 2005 of$ .03 to $ .94 per share . The Company's Form 10-K, which is being filed today,reflects the restated quarterly results . The Company plans to timely file a Form 8-K and Form 10-Q/A's with the SEC disclosing the quarterly restatements .

23 . In the wake of the disclosure of the foregoing items, shares in Astea stock droppe d

by nearly 30%, on very heavy trading, from $16 .50 per share to a closing price of $11 .73 per

share . During the Class Period, Astea stock traded as high as $25 .71 per share .

24. On April 4, 2006, the Company provided further details regarding its accountin g

improprieties . In a filing on Form 8-K with the SEC, the Company stated :

ITEM 4.02 . Non-Reliance on Previously Issued Financial Statements or a RelatedAudit Report or Completed Interim Review .

We have reviewed our accounting for capitalized software in conjunction with theyear-end audit of our financial statements by our independent auditors . As aresult, on March 29, 2006, management advised our Audit Committee of theBoard of Directors that it had made a determination, that our accounting forcapitalized software development costs required adjustment .

Management and our Audit Committee also discussed these issues with ourindependent public accounting firm . Our Audit Committee concurs withmanagement's determination that the prior accounting for capitalized softwaredevelopment costs had been overcapitalized and will require restatement ofcertain prior period financial statements . Accordingly, on March 29, 2006, we

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determined that our previously issued financial statements for the quarters endingMarch 31, 2005, June 30, 2005 and September 30, 2005, contained in ourquarterly reports on Form 10-Q for such fiscal quarters, should no longer be reliedon .

In reviewing the detail of software development costs, it came to our attention thatwe had overcapitalized software development costs in the first two fiscal quartersof 2005 and undercapitalized software development costs in the third fiscalquarter of 2005 . The impact of the restatement on basic and diluted net earnings(loss) per share is ($ .04) in the first quarter of 2005, ($ .07) in the second quarter

of 2005, and $ .03 in the third quarter of 2005, for a net restatement of ($ .08) per

share .

We anticipate filing the corrections to our quarterly financial statements on Forms10-Q/A in the near future . Our annual report for the year ended December 31,2005, which was filed with the Securities and Exchange Commission on March30, 2006, reflected these adjustments .

APPLICABILITY OF PRESUMPTION OF RELIANCE :FRAUD-ON-THE-MARKET DOCTRINE

25 . At all relevant times, the market for Astea common stock was an efficient marke t

for the following reasons, among others :

a. Astea common stock was listed and actively traded, on the NASDAQ, a highl y

efficient market ;

b. As a regulated issuer, the Company filed periodic public reports with the SEC ;

c . Astea stock was followed by securities analysts employed by major brokerage firm s

who wrote reports which were distributed to the sales force and certain customers o f

their respective brokerage firms . Each of these reports was publicly available an d

entered the public marketplace ;

d. Astea regularly issued press releases which were carried by national news wires .

Each of these releases was publicly available and entered the public marketplace .

26. As a result, the market for Astea securities promptly digested current information

with respect to the Company from all publicly available sources and reflected such informatio n

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in the Company's stock price . Under these circumstances, all purchasers of Astea common stock

during the Class Period suffered similar injury through their purchase of stock at artificially

inflated prices and a presumption of reliance applies .

NO SAFE HARBOR

27 . The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this complaint .

The specific statements pleaded herein were not identified as "forward-looking statements" when

made. Nor was it stated with respect to any of the statements forming the basis of this complain t

that actual results could differ materially from those projected . To the extent there were any

forward-looking statements, there were no meaningful cautionary statements identifying

important factors that could cause actual results to differ materially from those in the purportedly

forward-looking statements . Alternatively, to the extent that the statutory safe harbor does apply

to any forward-looking statements pleaded herein, Defendants are liable for those false forward-

looking statements because at the time each of those forward-looking was made the particular

speaker knew that the particular forward-looking statement was false, and/or the forward-looking

statement was authorized and/or approved by an executive officer of the Company who knew

that those statements were false when made .

SCIENTER ALLEGATION S

28 . As alleged herein, Defendants acted with scienter in that Defendants knew or

recklessly disregarded that the public documents and statements, issued or disseminated by or in

the name of the Company, were materially false and misleading ; knew or recklessly disregarded

that such statements or documents would be issued or disseminated to the investing public ; and

knowingly and substantially participated or acquiesced in the issuance or dissemination of suc h

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statements or documents as primary violators of the federal securities laws. As set forth

elsewhere herein in detail, Defendants , by virtue of their receipt of information reflecting the true

facts regarding the Company and its business practices, their control over and/or receipt of th e

Company's allegedly materially misleading misstatements and/or their associations with the

Company which made them privy to confidential proprietary information concerning Astea wer e

active and culpable participants in the fraudulent scheme alleged herein . Defendants knew and/or

recklessly disregarded the falsity and misleading nature of the information which they caused t o

be disseminated to the investing public . This case does not involve allegations of false forward-

looking statements or projections but instead involves false statements concerning the

Company's business, finances, and operations . The ongoing fraudulent scheme described in thi s

complaint could not have been perpetrated over a substantial period of time, as has occurred ,

without the knowledge and complicity of the personnel at the highest level of the Company ,

including Defendants .

29. Defendants engaged in this scheme to inflate the price of Astea common stock i n

order to : (a) protect and enhance their executive positions and the substantial compensation an d

prestige they obtained thereby ; (b) enhance the value of their personal holdings of Astea commo n

stock and options ; and, (c) to use the Company's stock as currency for further corporat e

acquisitions .

Enhanced Executive Position and Compensation

30. On April 5, 2005, the Company filed with the SEC on Form 8-K a letter indicatin g

that Defendant Bergreen's employment relationship with the Company was amende d

retroactively to January 1, 2005 . The new terms of Bergreen's compensation were an increase i n

his annual salary to $250,000, up to $50,000 in discretionary annual bonuses and up to $100,00 0

in annual bonuses "based upon the achievement of earnings per share ("EPS") targets ."

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31 . On November 16, 2005, the Company filed with the SEC on Form 8-K a lette r

indicating that Defendant Etskovitz was promoted from acting CFO to permanent CFO. In

compensation thereof, Etskovitz received an increase in his annual salary to $200,000, up t o

$40,000 in discretionary annual bonuses and up to $80,000 in annual bonuses "based upon the

achievement of earnings per share (`BPS") targets . "

Insider Sales by Bergreen and Etskovitz

32 . During the Class Period, Defendants Bergreen and Etskovitz, profited by the sale o f

their artificial inflated Astea stock . Shortly after the November 15 announcement and the 30 %

surge in the value of the Company's stock, Bergreen and Etskovitz each sold shares of Aste a

stock as follows :

a. On November 22, 2005, Etskovitz exercised stock options and sold 10,000 share s

for $384,000 .

b. On November 23, 2005, Bergreen exercised stock options and sold 80 ,000 shares

for $1,126,400 .

33 . In all, Defendants Bergreen and Etskovitz sold over $1 .5 million in Astea stock

during the Class Period.

Corporate Acquisitions with Astea Stock

34 . On September 21, 2005, the Company through a wholly owned subsidiary, F C

Acquisition Corp . ("FC Acquisition"), acquired substantially all of the assets of FieldCentrix ,

Inc. ("FieldCentrix") for $3,336,000 . The transaction was an all stock purchase pursuant t o

which the Company issued 421,106 shares of Astea stock

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CLASS ACTION ALLEGATIONS

35 . Plaintiff brings this action as a class action pursuant to Rules 23(a) and (b)(3) of the

Federal Rule of Civil Procedure on behalf of a Class, consisting of all persons who purchased o r

otherwise acquired Astea common stock between May 11, 2005 to March 31, 2006, inclusive,

and who were damaged thereby. Excluded from the Class are Defendants, members of th e

immediate family of each of the Defendants, any subsidiary or affiliate of Astea and th e

directors, officers, and employees of Astea or its subsidiaries or affiliates, or any entity in whic h

any excluded person has a controlling interest, and the legal representatives , heirs , successors and

assigns of any excluded person .

36. The members of the Class are so numerous that joinder of all members i s

impracticable . While the exact number of Class members is unknown to Plaintiff at this time an d

can only be ascertained through discovery, Plaintiff believes that there are thousands of member s

of the Class located throughout the United States. Record owners and other members of the Clas s

may be identified from records maintained by the Company and/or its transfer agents and may b e

notified of the pendency of this action by mail, using a form of notice similar to that customaril y

used in securities class actions .

37 . Plaintiffs claims are typical of the claims of the other members of the Class as al l

members of the Class were similarly affected by Defendants' wrongful conduct in violation o f

federal law that is complained of herein .

38 . Plaintiff will fairly and adequately protect the interests of the members of the Clas s

and has retained counsel competent and experienced in class and securities litigation .

39. Common questions of law and fact exist as to all members of the Class an d

predominate over any questions solely affecting individual members of the Class . Among the

questions of law and fact common to the Class are :

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a. whether the federal securities laws were violated by Defendants' acts and omissions

as alleged herein ;

b. whether Defendants participated in and pursued the common course of conduct

complained of herein ;

c . whether documents, press releases , and other statements disseminated to th e

investing public and the Company's shareholders during the Class Perio d

misrepresented material facts about the business, finances, financial condition, and

prospects of Astea ;

d. whether statements made by Defendants to the investing public during the Clas s

Period misrepresented and/or omitted to disclose material facts about the business ,

finances, value, performance, and prospects of the Company ;

e. whether the market price of Astea common stock during the Class Period wa s

artificially inflated due to the material misrepresentations and failures to correct the

material misrepresentations complained of herein ; and

f. the extent to which the members of the Class have sustained damages and the

proper measure of damages .

39. A class action is superior to all other available methods for the fair and efficien t

adjudication of this controversy since joinder of all members is impracticable . Furthermore, a s

the damages suffered by individual Class members may be relatively small, the expense an d

burden of individual litigation make it impossible for members of the Class to individuall y

redress the wrongs done to them. There will be no difficulty in the management of this suit as a

class action .

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FIRST CLAIMViolations Of Section 10(b) Of The Exchange Act And Rule lOb-5 Promulgated Thereunder

Against All Defendants

40. Plaintiff repeats and realleges each and every allegation contained above .

41 . Each of the Defendants: (a) knew or recklessly disregarded material adverse non-

public information about the Company's financial results and then existing business conditions ,

which was not disclosed; and (b) participated in drafting, reviewing and/or approving th e

misleading statements, releases, reports, and other public representations of and about Astea .

42. During the Class Period, Defendants, with knowledge of or reckless disregard fo r

the truth, disseminated or approved the false statements specified above, which were misleadin g

in that they contained misrepresentations and failed to disclose material facts necessary in orde r

to make the statements made, in light of the circumstances under which they were made, no t

misleading .

43 . Defendants have violated § 10(b) of the Exchange Act and Rule 1Ob-5 promulgate d

thereunder in that they: (a) employed devices, schemes and artifices to defraud ; (b) made untrue

statements of material facts or omitted to state material facts necessary in order to make

statements made , in light of the circumstances under which they were made, not misleading ; or

(c) engaged in acts, practices and a course of business that operated as a fraud or deceit upon th e

purchasers of Astea stock during the Class Period .

44. Plaintiff and the Class have suffered damage in that, in reliance on the integrity o f

the market, they paid artificially inflated prices for Astea stock . Plaintiff and the Class would no t

have purchased Astea stock at the prices they paid, or at all, if they had been aware that th e

market prices had been artificially and falsely inflated by Defendants' false and misleadin g

statements .

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SECOND CLAIMViolation Of Section 20(a) Of The Exchange Act Against Defendants Bergreen and Etskovit z

45 . Plaintiff repeats and realleges each and every allegation contained above .

46. The individual Defendants (Bergreen and Etskovitz) acted as controlling persons o f

the Company within the meaning of § 20(a) of the Exchange Act . By reason of their senior

executive and/or Board positions they had the power and authority to cause the Company to

engage in the wrongful conduct complained of herein.

47. By reason of such wrongful conduct , Defendants Bergreen and Etskovitz are liabl e

pursuant to § 20(a) of the Exchange Act. As a direct and proximate result of these Defendants '

wrongful conduct, Plaintiff and the other members of the Class suffered damages in connectio n

with their purchases of Astea stock during the Class Period .

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief and judgment, as follows :

a. Determining that this action is a proper class action and certifying Plaintiff a s

class representative under Rule 23 of the Federal Rules of Civil Procedure ;

b. Awarding compensatory damages in favor of Plaintiff and the other Clas s

members against all Defendants, jointly and severally, for all damages sustaine d

as a result of Defendants' wrongdoing, in an amount to be proven at trial ,

including interest thereon ;

c. Awarding Plaintiff and the Class their reasonable costs and expenses incurred i n

this action, including counsel fees ands expert fees ; and

d. Such other and further relief as the Court may deem just and proper .

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JURY TRIAL DEMANDED

Plaintiff demands a trial by jury .

Dated : May 2, 2006

Respectfully submitted ,

Robert M . RosemanDavid FeldermanSPECTOR, ROSEMAN & KODROFF, P .C .1818 Market Street, Suite 2500Philadelphia, PA 19103Tel: (215) 496-0300Fax: (215) 496-661 1

and

COHEN, MILSTEIN, HAUSFELD &TOLL, P.L.L.C .

Steven J . TollDaniel S. SommersMatthew B. Kaplan1100 New York Avenue, NWWest Tower, Suite 500Washington, DC 20005-3934Tel: (202) 408-460 0Fax: (202) 408-469 9

Attorneys for Plaintiff and ProposedLead Counse l

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