Saturday, February 18, 2006


The law firm of Schatz & Nobel, P.C., which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the Southern District of California on behalf of all persons who purchased the common stock of Dot Hill Systems Corp (“Dot Hill” or the “Company”) (NASDAQ: HILL) between April 23, 2003 and February 3, 2005, inclusive, (the “Class Period”). Also included are those who purchased in a secondary offering on or around September 17, 2003.
The Complaint alleges defendants violated federal securities laws by issuing a series of materially false statements. Specifically, defendants concealed the following: (i) the Company's accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions; (ii) the Company's inadequate internal accounting process and controls enabled Dot Hill management to manipulate the Costs of Goods Sold and routinely and inappropriately misclassify “expenses”; (iii) the Company lacked effective internal controls in its financial reporting process; and (iv) the Company falsely reported its Q1-Q3 04 financial results by improperly recognizing revenue and by improperly recording expenses.
On February 3, 2005, the Company announced its preliminary Q4 04 financial results and that it would be restating its 2004 unaudited financial results due to a data entry error that the Company attributed to material weaknesses in its internal controls. The Company also stated that it had “identified other errors pertaining to the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004 that it deems immaterial, including: the incorrect classification of certain product costs as operating expenses, the failure to eliminate corresponding revenue and cost of goods sold entries and the presence of duplicate entries.”
If you are a member of the class, you may, no later than April 3, 2006, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a class member that acts on behalf of other class members in directing the litigation. Although your ability to share in any recovery is not affected by the decision whether or not to seek appointment as a lead plaintiff, lead plaintiffs make important decisions which could affect the overall recovery for class members, including decisions concerning settlement. The securities laws require the Court to consider the class member(s) with the largest financial interest as presumptively the most adequate lead plaintiff(s).
While Schatz & Nobel has not filed a lawsuit against the defendants, to view a copy of the Complaint initiating the class action or for more information about the case, class action cases in general, and your rights, please contact Schatz & Nobel toll-free at (800) 797-5499, or by e-mail at, or visit our website:


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