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GLANCY PRONGAY & MURRAY LLP

LIONEL Z. GLANCY (#134180) 

ROBERT V. PRONGAY (#270796) 

LESLEY F. PORTNOY (#304851) 

CHARLES H. LINEHAN (#307439) 

1925 Century Park East, Suite 2100 

Los Angeles, CA 90067 

Telephone: (310) 201-9150 

Facsimile: (310) 201-9160 

Email: rprongay@glancylaw.com 

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

JOSEPH RODRIGUEZ, Individually and 

On Behalf of All Others Similarly Situated, 

 Plaintiff, 

 v. 

GIGAMON INC., PAUL A. HOOPER, 

MICHAEL J. BURNS, and REX S. 

JACKSON, 

 Defendants. 

 Case No.: 

CLASS ACTION COMPLAINT FOR 

VIOLATIONS OF THE FEDERAL 

SECURITIES LAWS 

JURY TRIAL DEMANDED 

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CLASS ACTION COMPLAINT 

1 

Plaintiff Joseph Rodriguez (“Plaintiff”), by and through his attorneys, alleges the following 

upon information and belief, except as to those allegations concerning Plaintiff, which are alleged 

upon personal knowledge. Plaintiff’s information and belief is based upon, among other things, his 

counsel’s investigation, which includes without limitation: (a) review and analysis of regulatory 

filings made by Gigamon Inc., (“Gigamon” or the “Company”), with the United States (“U.S.”) 

Securities and Exchange Commission (“SEC”); (b) review and analysis of press releases and 

media reports issued by and disseminated by Gigamon; and (c) review of other publicly available 

information concerning Gigamon. 

NATURE OF THE ACTION AND OVERVIEW 

1. This is a class action on behalf of persons and entities that acquired Gigamon’s 

securities between October 27, 2016, and January 17, 2017, inclusive (the “Class Period”), against 

the Defendants,1 seeking to pursue remedies under the Securities Exchange Act of 1934 (the 

“Exchange Act”). 

2. Gigamon purportedly develops solutions that deliver “pervasive and dynamic 

intelligent visibility and control of traffic across networks.” The Company claims its “Visibility 

Fabric” enables visibility, modification, enhancement, and control of network traffic. The 

Company’s “GigaSECURE Security Delivery Platform” purportedly leverages its Visibility Fabric 

to streamline security operations by providing comprehensive visibility across the network to a 

variety of security tools including those typically used by enterprises. The Company claims its 

solutions enables security teams and IT personnel to gain advanced visibility into their IT 

infrastructure. 

3. On October 27, 2016, the Company held a conference call with investors and 

analysts to discuss the Company’s third quarter 2016 financial results. On the call, Defendant 

Michael J. Burns (“Burns”) also announced the Company’s fourth quarter 2016 financial 

guidance, including “revenue in the range of $91 million to $93 million.” 

4. Throughout the Class Period, Defendants made materially false and/or misleading 

 

1

 “Defendants” refers to Gigamon, Paul A. Hooper, Michael J. Burns, and Rex S. Jackson, 

collectively. 

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CLASS ACTION COMPLAINT 

2 

statements, as well as failed to disclose material adverse facts about the Company’s business, 

operations, and prospects. Specifically, Defendants failed to disclose: (1) that Gigamon was 

experiencing reduced product bookings in its North America West region; (2) that several of the 

Company’s significant customers were deferring purchasing decisions into 2017; (3) that the 

Company failed to properly include these trends in its financial guidance; and (4) that, as a result 

of the foregoing, Defendants’ statements about Gigamon’s business, operations, and prospects, 

including statements about its revenue guidance, were false and misleading and/or lacked a 

reasonable basis. 

5. On January 17, 2017, the Company issued a press release entitled “Gigamon 

Announces Preliminary Fourth Quarter and Fiscal Year 2016 Results.” Therein, the Company 

disclosed preliminary fourth quarter 2016 revenue of “$84.5 million to $85.0 million, compared to 

the company’s prior guidance of $91 million to $93 million.” The press release also quoted 

Defendant Paul Hooper (“Hooper”) as stating “fourth quarter revenue was below our prior 

guidance” and that “[f]ourth quarter revenue fell short primarily due to lower than expected 

product bookings in our North America West region, as several significant existing customer 

accounts deferred purchasing decisions into 2017.” 

6. On this news, the price of Gigamon common stock fell $12.65 per share, or 28.7%, 

to close at $31.40 per share on January 18, 2017, on unusually heavy trading volume. 

7. As a result of Defendants’ wrongful acts and omissions, and the precipitous decline 

in the market value of the Company’s securities, Plaintiff and other Class members have suffered 

significant losses and damages. 

JURISDICTION AND VENUE

8. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange 

Act (15 U.S.C. §§ 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17 

C.F.R. § 240.10b-5). 

9. This Court has jurisdiction over the subject matter of this action pursuant to 28 

U.S.C. § 1331 and Section 27 of the Exchange Act (15 U.S.C. § 78aa). 

10. Venue is proper in this Judicial District pursuant to 28 U.S.C. § 1391(b) and 

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CLASS ACTION COMPLAINT 

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Section 27 of the Exchange Act (15 U.S.C. § 78aa(c)). Substantial acts in furtherance of the 

alleged fraud or the effects of the fraud have occurred in this Judicial District. Many of the acts 

charged herein, including the dissemination of materially false and/or misleading information, 

occurred in substantial part in this Judicial District. In addition, the Company’s principal 

executive offices are located in this Judicial District. 

11. In connection with the acts, transactions, and conduct alleged herein, Defendants 

directly and indirectly used the means and instrumentalities of interstate commerce, including the 

United States mail, interstate telephone communications, and the facilities of a national securities 

exchange. 

PARTIES

12. Plaintiff Joseph Rodriguez, as set forth in the accompanying certification, 

incorporated by reference herein, purchased Gigamon common stock during the Class Period, and 

suffered damages as a result of the federal securities law violations and false and/or misleading 

statements and/or material omissions alleged herein. 

13. Defendant Gigamon Inc. is a Delaware corporation headquartered in Santa Clara, 

California. Gigamon’s common stock trades on the New York Stock Exchange (“NYSE”) under 

the symbol “GIMO.” 

14. Defendant Paul A. Hooper was, at all relevant times, the Chief Executive Officer 

(“CEO”) of Gigamon. 

15. Defendant Michael J. Burns was the Chief Financial Officer (“CFO”) of Gigamon 

at all relevant times until October 27, 2016. On November 9, 2016 Burns entered into a mutual 

separation and release agreement with the Company pursuant to which Burns will remain 

employed with the Company and provide “reasonable transition services” from October 27, 2016, 

until February 28, 2017. 

16. Defendant Rex S. Jackson (“Jackson”) was the CFO of Gigamon from October 27, 

2016, through the end of the Class Period. 

17. Defendants Hooper, Burns, Jackson (collectively the “Individual Defendants”), 

because of their positions with the Company, possessed the power and authority to control the 

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CLASS ACTION COMPLAINT 

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contents of Gigamon’s reports to the SEC, press releases and presentations to securities analysts, 

money and portfolio managers and institutional investors, i.e., the market. The Individual 

Defendants were provided with copies of the Company’s reports and press releases alleged herein 

to be misleading prior to, or shortly after, their issuance and had the ability and opportunity to 

prevent their issuance or cause them to be corrected. Because of their positions and access to 

material non-public information available to them, the Individual Defendants knew that the 

adverse facts specified herein had not been disclosed to, and were being concealed from, the 

public, and that the positive representations which were being made were then materially false 

and/or misleading. The Individual Defendants are liable for the false statements pleaded herein. 

SUBSTANTIVE ALLEGATIONS 

Background 

18. Gigamon purportedly develops solutions that deliver “pervasive and dynamic 

intelligent visibility and control of traffic across networks.” The Company claims its “Visibility 

Fabric” enables visibility, modification, enhancement, and control of network traffic. The 

Company’s “GigaSECURE Security Delivery Platform” purportedly leverages its Visibility Fabric 

to streamline security operations by providing comprehensive visibility across the network to a 

variety of security tools including those typically used by enterprises. The Company claims its 

solutions enables security teams and IT personnel to gain advanced visibility into their IT 

infrastructure. 

Materially False and Misleading 

Statements Issued During the Class Period 

19. The Class Period begins on October 27, 2016, on that day, the Company issued a 

press release entitled “Gigamon Reports Third Quarter 2016 Financial Results.” Therein, the 

Company, in relevant part, stated: 

Santa Clara, Calif., October 27, 2016 - Gigamon Inc. (NYSE:GIMO), the leader in 

traffic visibility solutions, today released financial results for the third quarter ended 

October 1, 2016. 

Third Quarter 2016 Financial Highlights: 

 Revenue of $83.5 million, up 47% year-over-year. 

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CLASS ACTION COMPLAINT 

5 

 GAAP gross margin was 83%, compared to 80% in the third quarter of 

fiscal 2015. 

 Non-GAAP gross margin was 83%, compared to 81% in the third quarter of 

fiscal 2015. 

 GAAP net income was $6.1 million, or $0.16 per diluted share, compared to 

GAAP net income of $4.3 million, or $0.12 per diluted share, in the third 

quarter of fiscal 2015. 

 Non-GAAP net income was $14.0 million, or $0.36 per diluted share, 

compared to non-GAAP net income of $8.0 million, or $0.22 per diluted 

share, in the third quarter of fiscal 2015. 

 Cash and investments were $245 million, up $17 million from the second 

quarter of 2016, and up $58 million from the third quarter of fiscal 2015. 

“Gigamon posted another strong set of results for our third quarter, delivering 

record revenue with a growth rate of 47 percent year-over-year,” said Paul Hooper, 

Chief Executive Officer of Gigamon. “Our business continues to accelerate with Q3 

representing our third consecutive quarter of an increasing year-over-year revenue 

growth rate. We continue to invest in our platform and solutions resulting in our 

new GigaVUE-HC1 product, which extends our GigaSECURE Security Delivery 

Platform to mid-sized enterprises and out to the edge of large enterprises. With our 

increasingly strong leadership and momentum in the industry, our securityenabling, network visibility platform has become an essential component of modern 

IT infrastructure.” 

20. On the same day, October 27, 2016, the Company held a conference call with 

investors and analysts to discuss the Company’s third quarter 2016 financial results. On the call, 

Defendant Burns also announced the Company’s fourth quarter 2016 financial guidance. Therein, 

Burns stated: 

Now, for our Q4 outlook. We’re excited to provide the following guidance using 

our same disciplined guidance methodology for our fiscal fourth quarter ending 

December 31, 2016. It’s based on non-GAAP results and excludes any stock-based 

compensation and related expenses. 

Our large deferred service, healthy product backlog and consistent quarterly 

linearity continue to provide good visibility on growth, profits and execution. We 

expect fourth quarter revenue in the range of $91 million to $93 million, 37% yearover-year growth at the midpoint. As we continue to execute on the profit drivers in 

all aspects of our business, we are confident that we will sustain gross margin at 

approximately the range of 82% to 83%. 

We continue to believe that now is a great time for us to invest in our business. 

We’re investing with conviction to expand our security portfolio, deliver nextgeneration technology and increase sales capacity to ensure continued strong 

growth next year. 

In the fourth quarter of 2016, we also expect to accrue accelerated year-end 

commissions due to our strong performance throughout the year. As a result, we are 

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CLASS ACTION COMPLAINT 

6 

forecasting fourth quarter operating expenses in the range of $54.5 million to $55.5 

million. 

We expect to book a 32% non-GAAP tax provision and with the diluted share count 

of approximately $39 million, we expect to deliver non-GAAP earnings per share in 

the range of $0.36 to $0.38. 

Achieving the midpoint of our fourth guidance will bring our 2016 annual revenue 

growth to 43%, our second consecutive year of accelerating revenue growth. We 

will deliver annual EPS growth of 56% and would result in annual gross margin 

above 82% and annual operating margin of 22%. 

21. The above statements identified in ¶¶19-20 were materially false and/or misleading, 

as well as failed to disclose material adverse facts about the Company’s business, operations, and 

prospects. Specifically, Defendants failed to disclose: (1) that Gigamon was experiencing reduced 

product bookings in its North America West region; (2) that several of the Company’s significant 

customers were deferring purchasing decisions into 2017; (3) that the Company failed to properly 

include these trends in its financial guidance; and (4) that, as a result of the foregoing, Defendants’ 

statements about Gigamon’s business, operations, and prospects, including statements about its 

revenue guidance, were false and misleading and/or lacked a reasonable basis.

Disclosures at the End of the Class Period 

22. On January 17, 2017, the Company issued a press release entitled “Gigamon 

Announces Preliminary Fourth Quarter and Fiscal Year 2016 Results.” Therein, the Company 

disclosed: 

Santa Clara, CA - January 17, 2017 - Gigamon (NYSE: GIMO), the industry leader 

in traffic visibility solutions, today announced preliminary results for the fourth 

quarter and fiscal year ended December 31, 2016. 

Gigamon currently expects: 

Fiscal Fourth Quarter 2016 Preliminary Results 

 Revenue of $84.5 million to $85.0 million, compared to the company’s prior 

guidance of $91 million to $93 million. 

 GAAP gross margin between 83 percent and 84 percent. 

 Non-GAAP gross margin between 83 percent and 84 percent, compared to 

the company’s prior guidance of 82 percent to 83 percent. 

 GAAP earnings per share of $0.18 to $0.20. 

 Non-GAAP earnings per share of $0.35 to $0.37 compared to the company’s 

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CLASS ACTION COMPLAINT 

7 

prior guidance of $0.36 to $0.38. 

Fiscal Year 2016 Preliminary Results 

 Revenue of $310.3 million to $310.8 million, an increase of approximately 

40 percent year-over-year. 

 GAAP gross margin between 81 percent and 82 percent, at the fourth 

quarter midpoint an approximate 280 basis point improvement year-overyear. 

 Non-GAAP gross margin between 82 percent and 83 percent, at the fourth 

quarter midpoint an approximate 250 basis point improvement year-overyear. 

 GAAP operating margin between 9 percent and 10 percent, at the fourth 

quarter midpoint an approximate 440 basis point expansion year-over-year. 

 Non-GAAP operating margin between 22 percent and 23 percent, at the 

fourth quarter midpoint an approximate 340 basis point expansion yearover-year. 

 GAAP earnings per share of $1.32 to $1.34, at the fourth quarter midpoint 

an approximate 680 percent year-over-year increase. 

 Non-GAAP earnings per share of $1.22 to $1.25, at the fourth quarter 

midpoint an approximate 50 percent year-over-year increase. 

“We are disappointed our fourth quarter revenue was below our prior guidance, but 

we are pleased with our overall financial performance in 2016, our second 

consecutive year of 40 percent year-over-year revenue growth,” said Paul Hooper, 

CEO of Gigamon. “Fourth quarter revenue fell short primarily due to lower than 

expected product bookings in our North America West region, as several significant 

existing customer accounts deferred purchasing decisions into 2017. 

23. On this news, the price of Gigamon common stock fell $12.65 per share, or 28.7%, 

to close at $31.40 per share on January 18, 2017, on unusually heavy trading volume. 

CLASS ACTION ALLEGATIONS

24. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil 

Procedure 23(a) and (b)(3) on behalf of a class, consisting of all persons and entities that acquired 

Gigamon’s securities between October 27, 2016, and January 17, 2017, inclusive, and who were 

damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers and 

directors of the Company, at all relevant times, members of their immediate families and their 

legal representatives, heirs, successors, or assigns, and any entity in which Defendants have or had 

a controlling interest. 

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CLASS ACTION COMPLAINT 

8 

25. The members of the Class are so numerous that joinder of all members is 

impracticable. Throughout the Class Period, Gigamon’s common stock actively traded on the 

NYSE. While the exact number of Class members is unknown to Plaintiff at this time and can 

only be ascertained through appropriate discovery, Plaintiff believes that there are at least 

hundreds or thousands of members in the proposed Class. Millions of Gigamon shares were 

traded publicly during the Class Period on the NYSE. As of October 31, 2016, Gigamon had 

36,127,054 shares of common stock outstanding. Record owners and other members of the Class 

may be identified from records maintained by Gigamon or its transfer agent and may be notified of 

the pendency of this action by mail, using the form of notice similar to that customarily used in 

securities class actions. 

26. Plaintiff’s claims are typical of the claims of the members of the Class as all 

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of 

federal law that is complained of herein. 

27. Plaintiff will fairly and adequately protect the interests of the members of the Class 

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

28. Common questions of law and fact exist as to all members of the Class and 

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

questions of law and fact common to the Class are: 

(a) whether the federal securities laws were violated by Defendants’ acts as alleged 

herein; 

(b) whether statements made by Defendants to the investing public during the Class 

Period omitted and/or misrepresented material facts about the business, operations, and prospects 

of Gigamon; and 

(c) to what extent the members of the Class have sustained damages and the proper 

measure of damages. 

29. A class action is superior to all other available methods for the fair and efficient 

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as the 

damages suffered by individual Class members may be relatively small, the expense and burden of 

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CLASS ACTION COMPLAINT 

9 

individual litigation makes it impossible for members of the Class to individually redress the 

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

action. 

UNDISCLOSED ADVERSE FACTS 

30. The market for Gigamon’s securities was open, well-developed and efficient at all 

relevant times. As a result of these materially false and/or misleading statements, and/or failures 

to disclose, Gigamon’s securities traded at artificially inflated prices during the Class Period. 

Plaintiff and other members of the Class purchased or otherwise acquired Gigamon’s securities 

relying upon the integrity of the market price of the Company’s securities and market information 

relating to Gigamon, and have been damaged thereby. 

31. During the Class Period, Defendants materially misled the investing public, thereby 

inflating the price of Gigamon’s securities, by publicly issuing false and/or misleading statements 

and/or omitting to disclose material facts necessary to make Defendants’ statements, as set forth 

herein, not false and/or misleading. The statements and omissions were materially false and/or 

misleading because they failed to disclose material adverse information and/or misrepresented the 

truth about Gigamon’s business, operations, and prospects as alleged herein. 

32. At all relevant times, the material misrepresentations and omissions particularized 

in this Complaint directly or proximately caused or were a substantial contributing cause of the 

damages sustained by Plaintiff and other members of the Class. As described herein, during the 

Class Period, Defendants made or caused to be made a series of materially false and/or misleading 

statements about Gigamon’s financial well-being and prospects. These material misstatements 

and/or omissions had the cause and effect of creating in the market an unrealistically positive 

assessment of the Company and its financial well-being and prospects, thus causing the 

Company’s securities to be overvalued and artificially inflated at all relevant times. Defendants’ 

materially false and/or misleading statements during the Class Period resulted in Plaintiff and 

other members of the Class purchasing the Company’s securities at artificially inflated prices, thus 

causing the damages complained of herein when the truth was revealed. 

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CLASS ACTION COMPLAINT 

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LOSS CAUSATION

33. Defendants’ wrongful conduct, as alleged herein, directly and proximately caused 

the economic loss suffered by Plaintiff and the Class. 

34. During the Class Period, Plaintiff and the Class purchased Gigamon’s securities at 

artificially inflated prices and were damaged thereby. The price of the Company’s securities 

significantly declined when the misrepresentations made to the market, and/or the information 

alleged herein to have been concealed from the market, and/or the effects thereof, were revealed, 

causing investors’ losses. 

SCIENTER ALLEGATIONS

35. As alleged herein, Defendants acted with scienter since Defendants knew that the 

public documents and statements issued or disseminated in the name of the Company were 

materially false and/or misleading; knew 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 such statements or documents as primary violations of the 

federal securities laws. As set forth elsewhere herein in detail, the Individual Defendants, by 

virtue of their receipt of information reflecting the true facts regarding Gigamon, their control 

over, and/or receipt and/or modification of Gigamon’s allegedly materially misleading 

misstatements and/or their associations with the Company which made them privy to confidential 

proprietary information concerning Gigamon, participated in the fraudulent scheme alleged herein. 

APPLICABILITY OF PRESUMPTION OF RELIANCE 

(FRAUD-ON-THE-MARKET DOCTRINE)

36. The market for Gigamon’s securities was open, well-developed and efficient at all 

relevant times. As a result of the materially false and/or misleading statements and/or failures to 

disclose, Gigamon’s securities traded at artificially inflated prices during the Class Period. On 

November 25, 2016, the Company’s stock price closed at a Class Period high of $60.35 per share. 

Plaintiff and other members of the Class purchased or otherwise acquired the Company’s 

securities relying upon the integrity of the market price of Gigamon’s securities and market 

information relating to Gigamon, and have been damaged thereby. 

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CLASS ACTION COMPLAINT 

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37. During the Class Period, the artificial inflation of Gigamon’s stock was caused by 

the material misrepresentations and/or omissions particularized in this Complaint causing the 

damages sustained by Plaintiff and other members of the Class. As described herein, during the 

Class Period, Defendants made or caused to be made a series of materially false and/or misleading 

statements about Gigamon’s business, prospects, and operations. These material misstatements 

and/or omissions created an unrealistically positive assessment of Gigamon and its business, 

operations, and prospects, thus causing the price of the Company’s securities to be artificially 

inflated at all relevant times, and when disclosed, negatively affected the value of the Company 

stock. Defendants’ materially false and/or misleading statements during the Class Period resulted 

in Plaintiff and other members of the Class purchasing the Company’s securities at such 

artificially inflated prices, and each of them has been damaged as a result. 

38. At all relevant times, the market for Gigamon’s securities was an efficient market 

for the following reasons, among others: 

(a) Gigamon stock met the requirements for listing, and was listed and actively traded 

on the NYSE, a highly efficient and automated market; 

(b) As a regulated issuer, Gigamon filed periodic public reports with the SEC and/or 

the NYSE; 

(c) Gigamon regularly communicated with public investors via established market 

communication mechanisms, including through regular dissemination of press releases on the 

national circuits of major newswire services and through other wide-ranging public disclosures, 

such as communications with the financial press and other similar reporting services; and/or 

(d) Gigamon was followed by securities analysts employed by brokerage firms who 

wrote reports about the Company, and these reports were distributed to the sales force and certain 

customers of their respective brokerage firms. Each of these reports was publicly available and 

entered the public marketplace. 

39. As a result of the foregoing, the market for Gigamon’s securities promptly digested 

current information regarding Gigamon from all publicly available sources and reflected such 

information in Gigamon’s stock price. Under these circumstances, all purchasers of Gigamon’s 

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CLASS ACTION COMPLAINT 

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securities during the Class Period suffered similar injury through their purchase of Gigamon’s 

securities at artificially inflated prices and a presumption of reliance applies. 

40. A Class-wide presumption of reliance is also appropriate in this action under the 

Supreme Court’s holding in Affiliated Ute Citizens of Utah v. United States, 406 U.S. 128 (1972), 

because the Class’s claims are, in large part, grounded on Defendants’ material misstatements 

and/or omissions. Because this action involves Defendants’ failure to disclose material adverse 

information regarding the Company’s business operations and financial prospects—information 

that Defendants were obligated to disclose—positive proof of reliance is not a prerequisite to 

recovery. All that is necessary is that the facts withheld be material in the sense that a reasonable 

investor might have considered them important in making investment decisions. Given the 

importance of the Class Period material misstatements and omissions set forth above, that 

requirement is satisfied here. 

NO SAFE HARBOR

41. 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 statements alleged to be false and misleading herein all relate to then-existing facts and 

conditions. In addition, to the extent certain of the statements alleged to be false may be 

characterized as forward looking, they were not identified as “forward-looking statements” when 

made and 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. 

In the alternative, to the extent that the statutory safe harbor is determined to apply to any forwardlooking statements pleaded herein, Defendants are liable for those false forward-looking 

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

had actual knowledge that the forward-looking statement was materially false or misleading, 

and/or the forward-looking statement was authorized or approved by an executive officer of 

Gigamon who knew that the statement was false when made. 

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FIRST CLAIM 

Violation of Section 10(b) of The Exchange Act and 

Rule 10b-5 Promulgated Thereunder 

Against All Defendants 

42. Plaintiff repeats and realleges each and every allegation contained above as if fully 

set forth herein. 

43. During the Class Period, Defendants carried out a plan, scheme and course of 

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing 

public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and 

other members of the Class to purchase Gigamon’s securities at artificially inflated prices. In 

furtherance of this unlawful scheme, plan and course of conduct, Defendants, and each defendant, 

took the actions set forth herein. 

44. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made 

untrue statements of material fact and/or omitted to state material facts necessary to make the 

statements not misleading; and (iii) engaged in acts, practices, and a course of business which 

operated as a fraud and deceit upon the purchasers of the Company’s securities in an effort to 

maintain artificially high market prices for Gigamon’s securities in violation of Section 10(b) of 

the Exchange Act and Rule 10b-5. All Defendants are sued either as primary participants in the 

wrongful and illegal conduct charged herein or as controlling persons as alleged below. 

45. Defendants, individually and in concert, directly and indirectly, by the use, means 

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a 

continuous course of conduct to conceal adverse material information about Gigamon’s financial 

well-being and prospects, as specified herein. 

46. Defendants employed devices, schemes and artifices to defraud, while in 

possession of material adverse non-public information and engaged in acts, practices, and a course 

of conduct as alleged herein in an effort to assure investors of Gigamon’s value and performance 

and continued substantial growth, which included the making of, or the participation in the making 

of, untrue statements of material facts and/or omitting to state material facts necessary in order to 

make the statements made about Gigamon and its business operations and future prospects in light 

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CLASS ACTION COMPLAINT 

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of the circumstances under which they were made, not misleading, as set forth more particularly 

herein, and engaged in transactions, practices and a course of business which operated as a fraud 

and deceit upon the purchasers of the Company’s securities during the Class Period. 

47. Each of the Individual Defendants’ primary liability and controlling person liability 

arises from the following facts: (i) the Individual Defendants were high-level executives and/or 

directors at the Company during the Class Period and members of the Company’s management 

team or had control thereof; (ii) each of these defendants, by virtue of their responsibilities and 

activities as a senior officer and/or director of the Company, was privy to and participated in the 

creation, development and reporting of the Company’s internal budgets, plans, projections and/or 

reports; (iii) each of these defendants enjoyed significant personal contact and familiarity with the 

other defendants and was advised of, and had access to, other members of the Company’s 

management team, internal reports and other data and information about the Company’s finances, 

operations, and sales at all relevant times; and (iv) each of these defendants was aware of the 

Company’s dissemination of information to the investing public which they knew and/or 

recklessly disregarded was materially false and misleading. 

48. Defendants had actual knowledge of the misrepresentations and/or omissions of 

material facts set forth herein, or acted with reckless disregard for the truth in that they failed to 

ascertain and to disclose such facts, even though such facts were available to them. Such 

defendants’ material misrepresentations and/or omissions were done knowingly or recklessly and 

for the purpose and effect of concealing Gigamon’s financial well-being and prospects from the 

investing public and supporting the artificially inflated price of its securities. As demonstrated by 

Defendants’ overstatements and/or misstatements of the Company’s business, operations, financial 

well-being, and prospects throughout the Class Period, Defendants, if they did not have actual 

knowledge of the misrepresentations and/or omissions alleged, were reckless in failing to obtain 

such knowledge by deliberately refraining from taking those steps necessary to discover whether 

those statements were false or misleading. 

49. As a result of the dissemination of the materially false and/or misleading 

information and/or failure to disclose material facts, as set forth above, the market price of 

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CLASS ACTION COMPLAINT 

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Gigamon’s securities was artificially inflated during the Class Period. In ignorance of the fact that 

market prices of the Company’s securities were artificially inflated, and relying directly or 

indirectly on the false and misleading statements made by Defendants, or upon the integrity of the 

market in which the securities trades, and/or in the absence of material adverse information that 

was known to or recklessly disregarded by Defendants, but not disclosed in public statements by 

Defendants during the Class Period, Plaintiff and the other members of the Class acquired 

Gigamon’s securities during the Class Period at artificially high prices and were damaged thereby. 

50. At the time of said misrepresentations and/or omissions, Plaintiff and other 

members of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff 

and the other members of the Class and the marketplace known the truth regarding the problems 

that Gigamon was experiencing, which were not disclosed by Defendants, Plaintiff and other 

members of the Class would not have purchased or otherwise acquired their Gigamon securities, 

or, if they had acquired such securities during the Class Period, they would not have done so at the 

artificially inflated prices which they paid. 

51. By virtue of the foregoing, Defendants violated Section 10(b) of the Exchange Act 

and Rule 10b-5 promulgated thereunder. 

52. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and the 

other members of the Class suffered damages in connection with their respective purchases and 

sales of the Company’s securities during the Class Period. 

SECOND CLAIM 

Violation of Section 20(a) of The Exchange Act 

Against the Individual Defendants 

53. Plaintiff repeats and realleges each and every allegation contained above as if fully 

set forth herein. 

54. Individual Defendants acted as controlling persons of Gigamon within the meaning 

of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level positions and 

their ownership and contractual rights, participation in, and/or awareness of the Company’s 

operations and intimate knowledge of the false financial statements filed by the Company with the 

SEC and disseminated to the investing public, Individual Defendants had the power to influence 

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and control and did influence and control, directly or indirectly, the decision-making of the 

Company, including the content and dissemination of the various statements which Plaintiff 

contends are false and misleading. Individual Defendants were provided with or had unlimited 

access to copies of the Company’s reports, press releases, public filings, and other statements 

alleged by Plaintiff to be misleading prior to and/or shortly after these statements were issued and 

had the ability to prevent the issuance of the statements or cause the statements to be corrected. 

55. In particular, Individual Defendants had direct and supervisory involvement in the 

day-to-day operations of the Company and, therefore, had the power to control or influence the 

particular transactions giving rise to the securities violations as alleged herein, and exercised the 

same. 

56. As set forth above, Gigamon and Individual Defendants each violated Section 

10(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of their 

position as controlling persons, Individual Defendants are liable pursuant to Section 20(a) of the 

Exchange Act. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and 

other members of the Class suffered damages in connection with their purchases of the 

Company’s securities 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 under Rule 23 of the Federal 

Rules of Civil Procedure; 

(b) Awarding compensatory damages in favor of Plaintiff and the other Class members 

against all defendants, jointly and severally, for all damages sustained 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 in 

this action, including counsel fees and expert fees; and 

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

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury. 

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CLASS ACTION COMPLAINT 

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Dated: January 27, 2017 GLANCY PRONGAY & MURRAY LLP

By: s/ Robert V. Prongay 

Lionel Z. Glancy 

Robert V. Prongay 

Lesley F. Portnoy 

Charles H. Linehan 

1925 Century Park East, Suite 2100 

Los Angeles, CA 90067 

Telephone: (310) 201-9150 

Facsimile: (310) 201-9160 

Email: rprongay@glancylaw.com 

 

Attorneys for Plaintiff 

Case 5:17-cv-00434-EJD Document 1 Filed 01/27/17 Page 18 of 20
1/23/2017

Case 5:17-cv-00434-EJD Document 1 Filed 01/27/17 Page 19 of 20
Date Transaction Type Quantity Unit Price

01/17/2017 Bought 1,000 $44.2765

Joseph Rodriguez's Transactions in

Gigamon, Inc. (GIMO)

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