LAWSUIT ACCUSES CHECKFREE OF DECEPTION.

A Radnor, Penn.-based law firm has filed a class-action lawsuit in the U.S. District Court for the Northern District of Georgia against Atlanta-based CheckFree Corp., claiming that the company violated the Securities Exchange Act of 1934 by allegedly misleading investors ahead of an earnings shortfall last year. The firm, Schiffrin Barroway Topaz & Kessler LLP, announced the suit last week and is seeking investors to join the class. From April to August 2006, CheckFree projected 25% annual transaction growth for the foreseeable future, as it raised its expectations and performance projections for its 2006 fiscal fourth quarter, according to the complaint. However, on Aug. 1, CheckFree "shocked investors and financial analysts," according to the law firm's press release, as it released fourth-quarter earnings that fell from the previous quarter, missing its own, and analysts', projections. During the period leading up to the earnings report, company insiders, including CheckFree Chairman and CEO Pete Kight, sold 378,000 shares of company stock worth more than $17.5 million, according to U.S. Security and Exchange Commission filings. The firm has not specified a dollar amount in its compliant, but it has demanded compensatory damages to be determined at trial. A CheckFree spokesperson tells CardLine that the company had not yet been served and that the company refrains from commenting on the specifics of any lawsuit. In other CheckFree news, Corillian Corp. announced that its shareholders approved CheckFree's plans to buy the Internet banking software and service provider (CardLine, 2/16).

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