1 steven j. toll daniel s. sommers cohen milstein...

Case 2:09-cv-00856-SRB Document 1 Filed 04/23/2009 of 31

1 Steven J. TollDaniel S. Sommers

2 Matthew K. HandleyCOHEN MILSTEIN SELLERS & TOLL PLLC

3 1100 New York Avenue, N.W.West Tower, STE 500

4 Washington, D.C. 20005-3964Telephone: (202) 408-4600

5 Facsimile: (212) 408-4699

6 Lynn Lincoln SarkoJuli E. Farris

7 KELLER ROHRBACK L.L.P.1201 Third Avenue, Suite 3200

8 Seattle, Washington 98101Telephone: (206) 623-1900

9 Facsimile: (206) 623-3384

10 Ron Kilgard, AZ No. 005902KELLER ROHRBACK, P.L.C.

11 3101 North Central Avenue, Suite 1400Phoenix, Arizona 85012

12 Telephone: (602) 248-0088Facsimile: (602) 248-2822

13Attorneys for Plaintiff

14UNITED STATES DISTRICT COURT

15

16 DISTRICT OF ARIZONA

17 DIMITRIY KARPOV, Individually and On CIVIL ACTION NO.Behalf of All Others Similarly Situated,

18Plaintiff, CLASS ACTION COMPLAINT

19vs.

20 JURY TRIAL DEMANDED INSIGHT ENTERPRISES, INC.,

21 TIMOTHY A. CROWN, RICHARD A.FENNESSY, STANLEY LAYBOURNE,

22 GLYNIS A. BRYAN, KAREN K.MCGINNIS, LARRY A. GUNNING,

23 ERIC J. CROWN, ROBERTSON C.JONES, MICHAEL M. FISHER,

24 BENNETT DORANCE, KATHLEEN S.PUSHOR and DAVID J. ROBINO,

25Defendants.

26

27 Plaintiff, Dimitriy Karpov ("Plaintiff), alleges the following based upon the investigation

28COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 1P.L.L.C.


I by Plaintiff's counsel, which included, among other things, a review of the defendants' public

2 documents, conference calls and announcements made by defendants, United States Securities

3and Exchange Commission ("SEC") filings, wire and press releases published by and regarding

4Insight Enterprises, Inc. ("Insight" or the "Company"), securities analysts' reports and advisories

5

6about the Company, and information readily available on the Internet, and Plaintiff believes that

7 substantial additional evidentiary support will exist for the allegations set forth herein after a

8 reasonable opportunity for discovery.

9NATURE OF THE ACTION AND OVERVIEW

10

11 1. This is a federal class action on behalf of purchasers of Insight's securities

12 between April 22, 2004 and February 6, 2009, inclusive (the "Class Period"), seeking to pursue

13 remedies under the Securities Exchange Act of 1934 (the "Exchange Act").

14

2. Insight provides brand-name information technology hardware, software, and

15services to large enterprises, small to medium-sized businesses, and public sector institutions in

1617 North America, Europe, the Middle East, Africa, and Asia-Pacific. The Company offers various

18 products, including notebooks and personal digital assistants, desktops and servers, network and

19 connectivity, storage devices, printers, memory and processors, supplies and accessories,

20 monitors and video, and hardware. The Company also offers services, such as lifecycle services,

21 networking and communication, high performance systems, and enterprise software.

22

3. On February 9, 2009 the Company shocked investors when it announced that it23

would be restating previously reported earnings because management had identified errors in the24

25way it historically accounted for certain aged trade credits.

26 4. Upon the release of this news, the Company's shares declined $2.85 per share, or

27 43.8 percent, to close on February 9, 2009 at $3.05 per share, on unusually heavy trading

28 volume.COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 2PLLCTTORNFYS ATT.MW


1 5. The Complaint alleges that, throughout the Class Period, defendants failed to

2 disclose material adverse facts about the Company's financial well-being. Specifically,

3defendants failed to disclose or indicate the following: (1) that the Company committed errors in

4the manner in which it accounted for certain aged trade credits; (2) that the Company's financial

5

6statements were not prepared in accordance with Generally Accepted Accounting Principles

7 ("GAAP"); (3) that the Company lacked adequate internal and financial controls; and (4) that, as

8 a result of the foregoing, the Company's financial statements were materially false and

9 misleading at all relevant times.

10

6. As a result of defendants' wrongful acts and omissions, and the precipitous

11decline in the market value of the Company's securities, Plaintiff and other Class Members have

12suffered significant losses and damages.

13

14JURISDICTION AND VENUE

15 7. The claims asserted herein arise under and pursuant to Sections 10(b) and 20(a) of

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

17 C.F.R. § 240.10b-5).

18

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

19Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1331.

20

219. Venue is proper in this Judicial District pursuant to Section 27 of the Exchange

22 Act, 15 U.S.C. § 78aa and 28 U.S.C. § 1391(b). Many of the acts and transactions alleged

23 herein, including the preparation and dissemination of materially false and misleading

24 information, occurred in substantial part in this Judicial District. Additionally, Insight's principal

25 executive offices are located within this Judicial District.

26

10. In connection with the acts, conduct and other wrongs alleged in this Complaint,27

defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,28

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I including but not limited to, the United States mails, interstate telephone communications and

2 the facilities of the national securities exchange.

3PARTIES

4

11. Plaintiff, Dimitriy Karpov, as set forth in the accompanying certification,5

6incorporated by reference herein, purchased Insight's securities at artificially inflated prices

7 during the Class Period and has been damaged thereby.

8 12. Defendant Insight is a Delaware corporation with its principal executive offices

9 located at 6820 South Hari Avenue, Tempe, Arizona.

10

13. Defendant Timothy A. Crown ("Timothy Crown") was, at relevant times, the

11Company's Chairman of the Board of Directors.

12

14. Defendant Richard A. Fennessy ("Fennessy") was, at relevant times, the1314 Company's President and Chief Executive Officer ("CEO").

15 15. Defendant Stanley Laybourne ("Laybourne") was, at relevant times, the Chief

16 Financial Officer. ("CFO")

17 16. Defendant Glynis A. Bryan ("Bryan") was, at relevant times, the Company's

18Chief Financial Officer. ("CFO")

19

17. Defendant Karen K. McGinnis ("McGinnis") was, at relevant times, the2021 Company's Chief Accounting Officer.

22 18. Defendant Larry A. Gunning ("Gunning") was at relevant times, a member of the

23 Company's Board of Directors.

24 19. Defendant Eric J. Crown ("Eric Crown") was at relevant times, a member of the


26

20. Defendant Robertson C. Jones ("Jones") was, at relevant times, a member of the27

Company's Board of Directors.28


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1 21. Defendant Michael M. Fisher ("Fisher") was, at relevant times, a member of the


3

22. Defendant Bennett Dorrance ("Dorrance") was, at relevant times, a member of the4

Company's Board of Directors.5

623. Defendant Kathleen S. Pushor ("Pushor") was, at relevant times, a member of the


8 24. Defendant David J. Robino ("Robino") was, at relevant times, a member of the


10

25. Defendants Timothy Crown, Fennessy, Laybourne, Bryan, McGinnis, Gunning,

11Eric Crown, Jones, Fisher, Dorrance, Pushor, and Robino are collectively referred to hereinafter

12as the "Individual Defendants." The Individual Defendants, because of their positions with the

13

14Company, possessed the power and authority to control the contents of Insight's reports to the

15 SEC, press releases and presentations to securities analysts, money and portfolio managers and

16 institutional investors, Le., the market. Each defendant was provided with copies of the

17 Company's reports and press releases alleged herein to be misleading prior to, or shortly after,

18their issuance and had the ability and opportunity to prevent their issuance or cause them to be

19corrected. Because of their positions and access to material non-public information available to

20them, each of these defendants knew that the adverse facts specified herein had not been

21

22 disclosed to, and were being concealed from, the public, and that the positive representations

23 which were being made were then materially false and misleading. The Individual Defendants

24 are liable for the false statements pleaded herein, as those statements were each "group-

25 published" information, the result of the collective actions of the Individual Defendants.

26

27

28COHEN, MILSTEIN,



1 SUBSTANTIVE ALLEGATIONS

2 Background

3 26. Insight is a provider of brand-name information technology (IT) hardware,

4software and services to large enterprises, small to medium-sized businesses (SMB) and public

5sector institutions in North America, Europe, the Middle East, Africa and Asia-Pacific. The

6Company operates in tlu-ee geographic operating segments: North America; Europe, Middle East

7

8 and Africa (EMEA), and Asia and Pacific (APAC). Insight is located in 22 countries, and

9 supports clients in 170 countries, transacting business in 17 languages and 13 currencies. The

10 Company's offerings in North America and the United Kingdom include brand-name IT

11hardware, software and services. In March 2007, the Company completed the sale of PC

12Wholesale, a division of its North America operating segment, which was engaged in the

13

14business of selling IT products.

15 Materially False and MisleadingStatements Issued During the Class Period

1627. The Class Period begins on April 22, 2004. On that date, the Company issued a

17press release entitled "Insight Enterprises Inc. Reports First Quarter Results; Net Sales of $733

18

19Million and Diluted Earnings Per Share of $0.34." Therein, the Company stated in relevant part:

20 "I am pleased to report our fourth consecutive quarter of sequential growth inboth net earnings and earnings per share," said Timothy A. Crown, chief

21 executive officer. "The migration of Insight's small to medium-sized business("SMB") account executives serving United States' customers to our new

22 Maximus system was completed in January, and although the quarter got off to a

23slow start while our account executives were becoming familiar with the newsystem, March was a strong month and momentum seems to have continued into

24 April."

25 Net sales for the quarter ended March 31, 2004 increased 3 % to $732.7 millionfrom $711.3 million in the same period in 2003. Net earnings and diluted

26 earnings per share for the first quarter of 2004 were $16.6 million and $0.34,

27respectively, compared to first quarter 2003 net earnings and diluted earningsper share of $7.0 million and $0.15, respectively. Excluding income recognized

28 in the quarter ended March 31, 2004 resulting from a reduction in liabilitiesCOHEN, MILSTEIN,



1 assumed in a previous acquisition of $2.9 million net of taxes, net earnings anddiluted earnings per share were $13.7 million and $0.28, respectively.

2 Excluding income recognized in the quarter ended March 31, 2003 resulting from

3 a reduction in liabilities assumed in a previous acquisition of $2.5 million net oftaxes and restructuring expenses of $1.9 million net of taxes, net earnings and

4 diluted earnings per share were $6.4 million and $0.14, respectively. A tabularreconciliation of financial measures prepared in accordance with accounting

5 principles generally accepted in the United States ("GAAP") to these non-GAAP

6financial measures is included below. [Emphasis added.]

28. On May 10, 2004, Insight filed its Quarterly Report with the SEC on Form 10-Q7

8 for the 2004 first fiscal quarter. The Company's 10-Q was signed by the defendants Laybourne

9 and Timothy Crown and reaffirmed the Company's financial results previously announced on

10 April 22, 2004.

1129. The Company's 10-Q filed on May 10, 2004 also contained Sarbanes-Oxley

12required certifications, signed by defendants Timothy Crown and Laybourne who stated.

13

1. I have reviewed this Quarterly Report on Form 10-Q of Insight

14 Enterprises, Inc.;

15 2. Based on my knowledge, this report does not contain any untrue statementof a material fact or omit to state a material fact necessary to make the

16 statements made, in light of the circumstances under which suchstatements were made, not misleading with respect to the period covered

17 by this report;

18 3. Based on my knowledge, the financial statements, and other financialinformation included in this report, fairly present in all material respects

19 the financial condition, results of operations and cash flows of the

20registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for

21 establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) for the

22 registrant and have:

23 a. Designed such disclosure controls and procedures, or caused suchdisclosure controls and procedures to be designed under our

24 supervision, to ensure that material information relating to theregistrant, including its consolidated subsidiaries, is made known

25 to us by others within those entities, particularly during the period

26in which this report is being prepared;

b. Evaluated the effectiveness of the registrant's disclosure controls

27 and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of

28COHEN, MILSTEIN,



1 the end of the period covered by this report based on suchevaluation; and

2c. Disclosed in this report any changes in the registrant's internal

3 control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal

4 quarter in the case of an annual report) that has materially affected,or is reasonably likely to materially affect, the registrant's internal

5 control over financial reporting; and

6 5. The registrant's other certifying officer and I have disclosed, based on ourmost recent evaluation of internal control over financial reporting, to the

7 registrant's auditors and the audit committee of registrant's board ofdirectors (or persons performing the equivalent function):

8a. All significant deficiencies and material weaknesses in the design

9 or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant's ability to

10 record, process, summarize and report financial information; and

11 b. Any fraud, whether or not material, that involves management orother employees who have a significant role in the registrant's

12 internal control over financial reporting.

13 30. On January 27, 2005, the Company issued a press release entitled "Insight

14 Enterprises Inc. Reports Fourth Quarter Results' Net Sales - $806 Million; GAAP Diluted EPS

15- $0.62; Non GAAP Diluted EPS - $0.31." Therein, the Company stated, in relevant part:

16Jan. 27, 2005--Insight Enterprises Inc. today reported results of

17 operations for the three months and year ended Dec. 31, 2004.

18 Fourth Quarter Highlights:

19 •• Quarterly net sales growth of 9% from $739.2 million in Q4 2003 to

20 $805.7 million in Q4 2004.

21 • 2491 year-over year growth in quarterly non-GAAP(A) diluted EPS from$0.25 in Q4 2003 to $0.31 in Q4 2004.

22Insight North America posted non-GAAP(A) earnings from operations•

23 as a percentage of net sales of 2.7% -- the highest operating margin for

24 Insight North America in the past 10 quarters.

25 • Sold remaining shares in PlusNet, a leading Internet service provider inthe United Kingdom, and recorded gain on sale in Q4 2004 of $17.1

26 million.

27 • Announced hiring of Richard A. Fennessy as chief executive officer

28 effective Nov. 15, 2004.

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1"The fourth quarter was another strong quarter resulting in year-over-

2 year growth in net sales and non-GAAP diluted earnings per share of 9%and 2491, respectively," said Richard A. Fennessy, chief executive officer.

3 "I am pleased with the results of the quarter and strategic direction we aretaking to continue this growth into 2005 and beyond." [Emphasis added.]

431. On March 7, 2005, Insight filed its Annual Report for fiscal year 2004 with the

5

6 SEC on Form 10-K. The Company's 10-K was signed by the defendants Fennessy, Laybourne,

7 Timothy Crown, Eric Crown, Gunning, Jones, Fisher, and Dorrance, and reaffirmed the

8 Company's financial results previously announced on January 27, 2005. The Company's 10-K

9 also contained Sarbanes-Oxley required certifications, substantially similar to the certifications

10contained in lf 29, supra.

1132. On January 26, 2006, the Company issued a press release entitled "Insight

12

13Enterprises Inc. Reports Fourth Quarter Results." Therein, the Company stated, in relevant part:

14 Insight Enterprises today reported results of operations for the three months andyear ended Dec. 31, 2005.

15Fourth Quarter Highlights:

16

17-- Quarterly net sales growth of 3.4% from $805.7 million in Q4 2004 to $832.9million in Q4 2005.

18Non-GAAP(a) net earnings growth of 9%from $15.4 million in Q4 2004 to

19 $16.8 million in Q4 2005. (GAAP net earnings decline of 64%)

20 --13 % year-over-year growth in non-GAAP(a) diluted EPS from $0.31 in Q4

21 2004 to $0.35 in Q4 2005. (GAAP diluted EPS decline from $0.62 in Q4 2004 to$0.23 in Q4 2005.)

22-- Quarterly non-GAAP(a) operating margin of 3.3%. (GAAP operating margin of

23 2.4%.)

24 -- Quarterly net sales and non-GAAP(a) earnings from operations growth for

25 Insight North America of 3.8% and 19%, respectively, over prior year.-- Quarterly non-GAAP(a) earnings from operations growth for Insight UK of

26 14% over. prior year.

27 -- "I am pleased to announce that Insight Enterprises Inc. had another solid

28quarter, obtaining year-over-year growth in net sales, non-GAAP net earnings,

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ase 2:09-cv-00856-SRB Document 1 Filed 04/23/2009 of 31

1 and non-GAAP diluted earnings per share while reaching our highest non-GAAP operating margin since Q12002," said Rich Fennessy, chief executive

2 officer. [Emphasis added.]

333. On February 17, 2006, Insight filed its Annual Report for fiscal year 2005 with

4the SEC on Form 10-K. The Company's 10-Q was signed by the defendants Fennessy,

56 Laybourne, Timothy Crown, Eric Crown, Gunning, Jones, Fisher, Dorrance, and Pushor, and

7 reaffirmed the Company's financial results previously announced on January 26, 2006. The

8 Company's 10-K also contained Sarbanes-Oxley required certifications, substantially similar to

9 the certifications contained in 129, supra.

10 34. On January 30, 2007, the Company issued a press release entitled "Insight

11Enterprises, Inc. Reports Preliminary Fourth Quarter Results." Therein, the Company stated, in

12relevant part:

13

14Fourth Quarter Highlights:

15 -- Quarterly net sales growth of 57% from $812.1 million in Q4 2005 to $1.27billion in Q4 2006.

16-- Quarterly non-GAAP(1) net earnings growth of 25% from $17.0 million in

17 Q4 2005 to $21.2 million in Q4 2006 (GAAP net earnings grew 69% from

18 $11.1 million to $18.8 million).

19 Non-GA4P(1) diluted EPS growth of 23 %from $0.35 in Q4 2005 to $0.43in Q4 2006 (GAAP diluted EPS grew 65% from $0.23 in Q4 2005 to $0.38 in

20 Q42006).

21 -- North America quarterly net sales and non-GA4P(1) earnings from

22 operations increased 33% and 32%, respectively, over the prior year (GAAPearnings from operations increased 180).

23EMEA quarterly net sales and non-GAAP(1) earnings from operations

24 increased 190% and 158%, respectively, over the prior year (GAAP earningsfrom operations increased 253%).

25

26 APAC quarterly net sales and non-GAAP(1) earnings from operations were$23.4 million and $835,000, respectively (GAAP earnings from operations were

27 $824,000).

28 2006 Full Year Highlights:COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 10PLLC


1-- Annual net sales growth of 20% from $3.18 billion in 2005 to $3.82 billion

2 1n2006.

3-- Annual non-GA4P(1) net earnings growth of 20% from $64.0 million in

4 2005 to $76.7 million in 2006 (GAAP net earnings grew 39% from $54.7million to $76.2 million).

5 Non-GAAP(1) diluted EPS growth of 21 %from $1.30 in 2005 to $1.57 in

62006 (GAAP diluted EPS grew 39%from $1.12 in 2005 to $1.56 in 2006).

7 "I am very pleased to announce that Insight had a great quarter, whichprovided a strong ending to a very exciting and successful 2006, " said Rich

8 Fennessy, chief executive officer. '7 am proud to say we achieved recordquarterly and annual net sales, non-GAAP net earnings and non-GAAP

9 diluted earnings per share." [Emphasis added.]

10 35. On July 26, 2007, Insight filed its Annual Report for fiscal year 2006 with the

11SEC on Form 10-K. The Company's 10-K was signed by the defendants Fennessy,

12Laybourne, Timothy Crown, Eric Crown, Gunning, Jones, Fisher, Dorrance, Pushor and

1314 Robino, and reaffirmed the Company's financial results previously announced on January 30,

15 2007. The Company's 10-K also contained Sarbanes-Oxley required certifications,

16 substantially similar to the certifications contained in lf 29, supra

17 36. On February 6, 2008, the Company issued a press release entitled "Insight

18Enterprises, Inc. Reports Fourth Quarter and Full Year 2007 Results." Therein, the Company

19stated, in relevant part:

20Insight Enterprises today reported results of operations for the quarter and year

21 ended December 31, 2007.

22Fourth Quarter and 2007 Full Year Highlights

23-- Net sales for the fourth quarter increased 5% to $1.28 billion, and annual net

24 sales increased 34% to $4.80 billion.

25 -- Gross profit for the fourth quarter grew 10% to $173.3 million, and annual

26 gross profit grew 40% to $661.1 million.

27 -- Net earnings from continuing operations for the fourth quarter increased29% to $23.8 million, while annual net earnings from continuing operations

28 increased 13% to $72.0 million.COHEN, MILSTEIN,

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1-- Diluted EPS from continuing operations for the fourth quarter increased 3091

2 to $0.48, while annual diluted EPS from continuing operations increased 1091

3 to $1.44.

4 -- Q4 2007 results include expenses of $334,000, $201,000 net of tax, forprofessional fees and costs associated with our stock option review, while 2007

5 full year results include expenses of $13.0 million, $7.9 million net of tax, for

6such professional fees and costs and $2.6 million, $1.5 million net of tax, forseverance and restructuring expenses. Q4 2006 and full year 2006 results include

7 expenses of $1.6 million, $1.0 million net of tax, for professional fees associatedwith our stock option review and $729,000, $454,000 net of tax, for severance

8 and restructuring expenses.

9 "I am very pleased to announce that the overall performance of our

10geographic operating segments produced a solid fourth quarter, whichprovided a strong ending to a successful 2007, " said Rich Fennessy,

11 President and Chief Executive Officer. "As expected, our business delivered aseasonally stronger fourth quarter, and for the full year our overall financial

12 results exceeded our own internal expectations." [Emphasis added.]

13 37. On February 27, 2008, Insight filed its Annual Report for fiscal year 2007 with

14the SEC on Form 10-K. The Company's 10-K was signed by the defendants Fennessy, Bryan,

15Timothy Crown, Dorrance, Fisher, Gunning, Jones, Pushor, Robino, and McGinnis, and

1617 reaffirmed the Company's financial results previously announced on February 6, 2008. The

18 Company's 10-K also contained Sarbanes-Oxley required certifications, substantially similar to

19 the certifications contained in lf 29, supra.

20 38. On May 8, 2008, the Company issued a press release entitled "Insight Enterprises,

21 Inc. Reports First Quarter 2008 Results." Therein, the Company stated, in relevant part:

22Insight Enterprises, Inc. today reported results of operations for the quarter ended

23 March 31, 2008.

24 First Quarter Highlights

25 -- Net sales for the first quarter of 2008 decreased 1 % to $1.11 billion.

26-- Gross profit for the first quarter remained flat at $153.2 million.

27-- Net earnings from continuing operations for the first quarter decreased 14% to

28 $10.5 million.COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 12P.L.L.C.AT.,„„„, T Aw


1-- Diluted EPS from continuing operations for the first quarter decreased 12% to

2 $0.22.

3-- First quarter 2008 results from continuing operations include $1.9 million,

4 $1.1 million net of tax, for severance and restructuring expenses. First quarter2007 results include expenses of $5.7 million, $3.5 million net of tax, for

5 professional fees and costs associated with our stock option review.

6 "The first quarter of 2008 was a very challenging quarter for our business.

7 While overall our EMEA and APAC segments performed as expected, ourNorth America segment did not meet our internal expectations for profitability

8 during the quarter," stated Rich Fennessy, President and Chief ExecutiveOfficer. "As a result, we implemented a number of critical actions across our

9 business focused on increasing net sales and gross profit and reducing our

10expense base to improve our overall earnings performance for the balance of theyear in this challenging market environment," added Fennessy.

1139. Also on May 8, 2008, Insight filed its Quarterly Report with the SEC. The

12Company's 10-Q was signed by the defendants Fennessy and Bryan, and reaffirmed the

1314 Company's financial results previously announced that day. The Company's 10-Q also

15 contained Sarbanes Oxley required certifications, substantially similar to the certifications

16 contained in 1f29, supra.

17 40. On August 11, 2008, the Company issued a press release entitled "Insight

18Enterprises, Inc. Reports Second Quarter 2008 Results." Therein, the Company stated, in

19relevant part:

20Insight Enterprises, Inc. (Nasdaq . NSIT) (the "Company") today reported results

21 of operations for the quarter ended June 30, 2008.

22Second Quarter Highlights

23-- Net sales increased 9% to $1.40 billion.

24

25-- Gross profit grew 9% to $201.7 million.

26 -- Net earnings from continuing operations before a charge for goodwillimpairment remained flat at $26.9 million.* (Net loss from continuing

27 operations of ($174.3 million) including charge for goodwill impairment.)

28 -- Diluted EPS from continuing operations before a charge for goodwillCOHEN, MILSTEIN,

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1 impairment grew 7% to $0.58.* (Diluted EPS from continuing operations of

2($3.74) including charge for goodwill impairment.)

3 -- Second quarter 2008 results from continuing operations include $313.9million, $201.2 million net of tax, for a non-cash goodwill impairment charge,

4 which represented the entire goodwill balance of the North America operatingsegment.

5

6-- Second quarter 2008 results from continuing operations include $3.5 million,$2.3 million net of tax, for severance and restructuring expenses. Annualized

7 savings of $4.0 million to $5.5 million are targeted from restructuring activitiesin the second quarter.

8--Second quarter 2007 results include severance expenses of $2.8 million, $1.7

9 million net of tax, and expenses of $4.3 million, $2.6 million net of tax, for

10professional fees and costs associated with the Company's stock option review.

11 --Completed the acquisition of Calence, LLC on April 1, 2008.

12 "We are pleased with our overall results in the second quarter and feel we haveregained some of the ground we lost in the first quarter," said Rich Fennessy,

13 President and Chief Executive Officer. "Having said this, we still have our workcut out for us in the second half of the year as we continue to compete in a

14 challenging demand environment."

15 41. Also on August 11, 2008, Insight filed its Quarterly Report with the SEC on Form

16 10Q. The Company's 10-Q was signed by the defendants Fennessy and Bryan, and reaffirmed

17 the Company's financial results previously announced that day. The Company's 10-Q also

18contained Sarbanes-Oxley required certifications, substantially similar to the certifications

19contained in lf 29, supra.

20

2142. On November 6, 2008, the Company issued a press release entitled "Insight

22 Enterprises, Inc. Reports Third Quarter 2008 Results." Therein, the Company stated, in relevant

23 part:

24 Insight Enterprises, Inc. today reported results of operations for the three monthsended September 30, 2008.

25

26Third Quarter Highlights

-- Net sales for the quarter increased 5% to $1.17 billion.27

28-- Gross profit for the quarter grew 3% to $154.1 million.

COHEN, MILSTEIN,SELLERS TOLL Class Action Complaint 14PLLCAT.,„„„, T Aw


1 -- Net earnings from continuing operations for the quarter decreased to $6.7million from $9.1 million.

2-- Diluted EPS from continuing operations for the quarter declined to $0.15 from

3 $0.18.

4 -- Third quarter 2008 results include $3.3 million of foreign currency losses,primarily resulting from the strengthening of the U.S. dollar against the Euro and

5 the British Pound Sterling and the volatility of those exchange rates during thequarter. The 2007 results included $849,000 of net foreign currency losses.

6--Third quarter 2008 results include $1.1 million of tax benefit related to federal

7 and state research and development credits recorded during the quarter. -- Thirdquarter 2007 results include expenses of $2.5 million for professional fees

8 associated with our stock option review.

9 --Completed the acquisition of MINX Limited on July 10, 2008.

10 "In the third quarter, the demand environment for IT solutions continued to bevery challenging as the overall economy worsened, especially in September," said

11 Rich Fennessy, President and Chief Executive Officer. "In this environment, aswe finish out 2008 and head into 2009, we are focused on optimizing our new

12 sales coverage model and taking actions to reduce our base infrastructure costsand discretionary spending."

1343. On November 7, 2008, Insight filed its Quarterly Report with the SEC on Form

1410-Q. The Company's 10-Q was signed by defendants Fennessy and Bryan, and reaffirmed the

1516 Company's financial results previously announced on November 6, 2008. The Company's 10-Q

17 also contained Sarbanes-Oxley required certifications, substantially similar to the certifications

18 contained in lf 29, supra.

19 44. The statements contained in tf 27-43 were materially false and misleading when

20 made because defendants failed to disclose or indicate the following: (1) that the Company

21committed errors in the manner in which it accounted for certain aged trade credits; (2) that the

22Company's financial statements were not prepared in accordance with GAAP; (3) that the

23

24Company lacked adequate internal and financial controls; and (4) that, as a result of the

25 foregoing, the Company's financial statements were materially false and misleading at all

26 relevant times.

27

28COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 15PLLCTTORNFYS AT AW


1 The Truth Begins to Emerge

2 45. On February 9, 2009, the Company shocked investors when it issued a press

3release entitled, "Insight Enterprises, Inc. Reports Preliminary (Unaudited) Fourth Quarter 2008

4Results." Therein, the Company stated, in relevant part:

5Insight Enterprises, Inc. today announced preliminary financial results for the

6 fourth quarter of 2008 and its perspective on the 2009 market environment. TheCompany also said management has identified errors in the way it historically

7 accounted for certain aged trade credits generated in the ordinary course ofbusiness. Consequently, management and the Audit Committee of the Board of

8 Directors have determined that the Company will restate previously reportedearnings as further explained below.

9

10 The Company will host a conference call and live webcast today at 9:00 a.m. ETto discuss preliminary fourth quarter 2008 results of operations and the proposed

11 restatement.

12 Preliminary (Unaudited) Fourth Quarter Highlights

13The Company stated that it is still working tlu-ough its annual close process and

14 audit, and therefore, all financial results announced today are preliminary andsubject to final adjustments. These results specifically exclude the effect of the

15 proposed restatement and other final year end tax adjustments. Additionally,these results exclude certain possible non-cash adjustments resulting from the

16 determination of the utilization of foreign tax credits and the completion of the

17 Company's annual goodwill impairment testing.

18 • Net sales for the quarter are expected to decrease 10% to $1.16 billion.

19• Gross profit for the quarter is expected to decline 10% to $155.4 million.

20 • Net earnings from continuing operations for the quarter are expected to

21 decrease to $5.4 million from $23.8 million for the fourth quarter of 2007.

22 • Diluted earnings per share from continuing operations for the quarter areexpected to decline to $0.11 from $0.48 for the fourth quarter of 2007.

23

24• Fourth quarter 2008 results include $3.2 million in severance expense,

resulting from workforce reductions of over 280 positions in response to

25 the overall demand environment.

26• Fourth quarter 2008 results include $6.2 million of net foreign currencyexchange losses, primarily resulting from the strengthening of the U.S.

27 dollar against the Canadian dollar and the Euro against the British Pound

28Sterling, as well as the volatility of those exchange rates during the

COHEN, MILSTEIN,SELLERS TOLL Class Action Complaint 16PLLCAT.,„„„, T Aw


1 quarter.

2 • The Company's focus on cash management initiatives resulted in the pay

3 down of $103 million in debt in the fourth quarter.

4 "While softening demand for IT solutions led to fourth quarter resultsbelow management expectations, our successful efforts in 2008 to reduce

5 our base cost infrastructure and refine our go-to-market model partiallymitigated these results," said Rich Fennessy, President and Chief

6 Executive Officer. "Insight's underlying business strategy remains strong,and the Company will continue to take the necessary actions to ensure our

7 long-term success."

8 * * *

9 Restatement of Previously Issued Financial Statements

10 Following an internal review, the Company has determined that theCompany's historical accounting treatment, since 1996, of certain aged

11 trade credits created in the ordinary course of business was in error. Theerror

12rektes primarily to the release of certain aged trade credits from its

balance sheet to its statement of earnings prior to the complete release of the

13 underlying liabilities under applicable legal requirements. Insight isworking with its auditors and external advisors to quantify the related

14 liabilities and to establish new policies going forward. The review,covering trade credits since 1996, is' ongoing, but the Company expects that

15 it will restate financial statements which are included in the Company's

16most recently fled Annual Report on Form 10-K, for the year endedDecember 31, 2007, and in the Quarterly Reports on Form 10-Q for the first

17 three quarters of fiscal year 2008. The Company also expects that therestatement of its fuzancial statements will include a material reduction of

18 retained earnings as of December 31, 2004, related to the accumulation ofsuch errors in prior periods'. The cumulative restatement dject is expected to

19 be $50 million to $70 million, before consideration of any tax djects. Given

20the high volume of individual transactions involved and complexity ofresearching each item, the Company expects that the final settlement of these

21 liabilities may take multiple years and may eventually be settled for less thanthe estimated liability. Any difference between the restated amounts

22 accrued by the Company and the final settlement with counterparties

23will be reflected in the periods in which any such resolution occurs.

24 "Insight is committed to fairly and completely addressing the impactof our historical accounting practices and to putting this matter

25 definitively in the past," Mr. Fennessy said. "In fact, Insight hasalready made a number of important changes in our finance activities,

26 including new management in certain key finance roles, as well asupdates to our systems and policies to ensure the Company's

27 accounting practices are fully compliant going forward."

28COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 17PLLCTTOIENFYS AT AW


1 The Company has informed the administrative agent and lenders underits primary secured credit facilities of its intention to restate its

2 financial statements. The errors and consequent restatement constitute

3 a default under the Company's primary credit facilities. Accordingly,the Company sought and has received the waivers required to resolve

4 this default.

5 The Company will not release final fourth quarter and full year 2008

6results until it has finalized its year end closing process and audit,including the accounting related to the proposed restatement, at which

7 time it will file its 2008 financial statements with the Securities andExchange Commission ("SEC"). [Emphasis added.]

8

46. On this news, the Company's shares fell $2.85 per share, or 48.3 percent, to9

10close on February 9, 2009 at $3.05 per share, on unusually heavy trading volume.

11 INSIGHT'S VIOLATION OF GAAP RULESIN ITS FINANCIAL STATEMENTS FILED WITH THE SEC

12

47. These financial statements and the statements about the Company's financial13

14results were false and misleading, as such financial information was not prepared in

15 conformity with GAAP, nor was the financial information a fair presentation of the

16 Company's operations due to the Company's improper accounting for, and disclosure about

17 its revenues, in violation of GAAP rules.

18

48. GAAP are those principles recognized by the accounting profession as the

19conventions, rules and procedures necessary to define accepted accounting practice at a

20

21particular time. Regulation S-X (17 C.F.R. § 210.401 (a) (1)) states that financial statements

22 filed with the SEC which are not prepared in compliance with GAAP are presumed to be

23 misleading and inaccurate. Regulation S-X requires that interim financial statements must also

24 comply with GAAP, with the exception that interim financial statements need not include

25 disclosure which would be duplicative of disclosures accompanying annual financial statements.

2617 C.F.R. § 210.10-01(a).

27

49. The fact that Insight will restate its financial statements, and disclosed that these28

COHEN, MILSTEIN,SELLERS & TOLL Class Action Complaint 18PLLC

TTORNFYS AT AW


1 financial statements should not be relied upon is an admission that they were false and

2 misleading when originally issued (APB No.20, 77-13; SFAS No. 154,1j25).

350. Given these accounting irregularities, the Company announced financial results

4that were in violation of GAAP and the following principles:

5

6(a) The principle that "interim financial reporting should be based upon the

7 same accounting principles and practices used to prepare annual financial

8 statements" was violated (APB No. 28,10_0);

9 (b) The principle that "financial reporting should provide information that is

10 useful to present to potential investors and creditors and other users in

11making rational investment, credit, and similar decisions" was violated

12(FASB Statement of Concepts No. 1,1j34);

13

14(c) The principle that "financial reporting should provide information about

15 the economic resources of an enterprise, the claims to those resources, and

16 effects of transactions, events, and circumstances that change resources

17 and claims to those resources" was violated (FASB Statement of Concepts

18No. 1,140);

19(d) The principle that "financial reporting should provide information about

20

21an enterprise's financial performance during a period" was violated

22 (FASB Statement of Concepts No. 1, ¶ 42);

23 (e) The principle that "financial reporting should provide information about

24 how management of an enterprise has discharged its stewardship

25 responsibility to owners (stockholders) for the use of enterprise resources

26entrusted to it" was violated (FASB Statement of Concepts No. 1, lf 50);

27

28COHEN, MILSTEIN,

SELLERS TOLL Class Action Complaint 19PLLCATTOPNF.Y.SATT.MW


1 The principle that "financial reporting should be reliable in that it

2 represents what it purports to represent" was violated (FASB Statement of

3Concepts No. 2, tf 58-59);

4(g) The principle that "completeness, meaning that nothing is left out of the

5

6information that may be necessary to insure that it validly represents

7 underlying events and conditions" was violated (FASB Statement of

8 Concepts No. 2,179); and

9 (h) The principle that "conservatism be used as a prudent reaction to

10 uncertainty to try to ensure that uncertainties and risks inherent in business

11situations are adequately considered" was violated (FASB Statement of

12Concepts No. 2,1j95).

13

1451. The adverse information concealed by Defendants during the Class Period and

15 detailed above was in violation of Item 303 of Regulation S-K under the federal securities law

16 (17 C.F.R. §229.303).

17 PLAINTIFF'S CLASS ACTION ALLEGATIONS

18

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

19Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all those who purchased Insight

20

21securities between April 22, 2004 and February 6, 2009, inclusive (the "Class Period") and who

22 were damaged thereby. Excluded from the Class are defendants, the officers and directors of the

23 Company, at all relevant times, members of their immediate families and their legal

24 representatives, heirs, successors or assigns and any entity in which defendants have or had a

25 controlling interest.

26

53. The members of the Class are so numerous that joinder of all members is27

impracticable. Throughout the Class Period, Insight's securities were actively traded on the28


TTORNFYS AT AW


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

2 can only be ascertained tlu-ough appropriate discovery, Plaintiff believes that there are hundreds

3or thousands of members in the proposed Class. Record owners and other members of the Class

4may be identified from records maintained by Insight or its transfer agent and may be notified of

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

7 securities class actions.

8 54. Plaintiff's claims are typical of the claims of the members of the Class as all

9 members of the Class are similarly affected by defendants' wrongful conduct in violation of

10 federal law that is complained of herein.

11

55. Plaintiff will fairly and adequately protect the interests of the members of the12

Class and has retained counsel competent and experienced in class and securities litigation.13

1456. Common questions of law and fact exist as to all members of the Class and

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

16 questions of law and fact common to the Class are:

17 (a) whether the federal securities laws were violated by defendants' acts as

18alleged herein;

19(b) whether statements made by defendants to the investing public during the

20

21Class Period misrepresented material facts about the business, operations

22 and management of Insight; and

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

24 proper measure of damages.

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

26adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

27the damages suffered by individual Class members may be relatively small, the expense and

28COHEN, MILSTEIN,



1 burden of individual litigation make it impossible for members of the Class to individually

2 redress the wrongs done to them. There will be no difficulty in the management of this action

3as a class action.

4UNDISCLOSED ADVERSE FACTS

5

658. The market for Insight's securities was open, well-developed and efficient at all

7 relevant times. As a result of these materially false and misleading statements, and failures to

8 disclose, Insight's securities traded at artificially inflated prices during the Class Period.

9 Plaintiff and other members of the Class purchased or otherwise acquired Insight's securities

10 relying upon the integrity of the market price of Insight's securities and market information

11relating to Insight, and have been damaged thereby.

12

59. During the Class Period, defendants materially misled the investing public,13

14thereby inflating the price of Insight's securities, by publicly issuing false and misleading

15 statements and omitting to disclose material facts necessary to make defendants' statements, as

16 set forth herein, not false and misleading. Said statements and omissions were materially false

17 and misleading in that they failed to disclose material adverse information and misrepresented

18the truth about the Company, its business and operations, as alleged herein.

19

60. At all relevant times, the material misrepresentations and omissions20

21particularized in this Complaint directly or proximately caused or were a substantial

22 contributing cause of the damages sustained by Plaintiff and other members of the Class. As

23 described herein, during the Class Period, defendants made or caused to be made a series of

24 materially false or misleading statements about Insight's financial well-being. These material

25 misstatements and omissions had the cause and effect of creating in the market an

26unrealistically positive assessment of Insight and its financial well-being, thus causing the

27Company's securities to be overvalued and artificially inflated at all relevant times. Defendants'

28COHEN, MILSTEIN,

SELLERS & TOLL Class Action Complaint 22PLLCTTORNFYS AT AW


I materially false and misleading statements during the Class Period resulted in Plaintiff and other

2 members of the Class purchasing the Company's securities at artificially inflated prices, thus

3causing the damages complained of herein.

4LOSS CAUSATION

5

661. The defendants' wrongful conduct, as alleged herein, directly and proximately

7 caused the economic loss suffered by Plaintiff and the Class.

8 62. During the Class Period, Plaintiff and the Class purchased Insight's securities at

9 artificially inflated prices and were damaged thereby. The price of Insight's securities

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

11alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,

12causing investors' losses.

13

14SCIENTER ALLEGATIONS

15 63. As alleged herein, defendants acted with scienter in that defendants knew that the

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

17 materially false and misleading; knew that such statements or documents would be issued or

18disseminated to the investing public; and knowingly and substantially participated or acquiesced

19in the issuance or dissemination of such statements or documents as primary violations of the

20

21federal securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their

22 receipt of information reflecting the true facts regarding Insight their control over, and/or receipt

23 and/or modification of Insight's allegedly materially misleading misstatements and/or their

24 associations with the Company which made them privy to confidential proprietary information

25 concerning Insight, participated in the fraudulent scheme alleged herein.

26

64. Additionally, during the Class Period, and with the Company's securities trading27

at artificially inflated prices, Company insiders sold 2,287,309 shares of the Company's stock for28

COHEN, MILSTEIN,SELLERS & TOLL Class Action Complaint 23PLLC

TTORNFYS AT AW


1 gross proceeds of $49,069,799 including over $32 million in gross proceeds received by the

2 Individual Defendants.

3Applicability of Presumption of Reliance:

4 Fraud on the Market Doctrine

5 65. At all relevant times, the market for Insight's securities was an efficient market

6 for the following reasons, among others:

7(a) Insight's securities met the requirements for listing, and were listed and

8actively traded on the NASDAQ, a highly efficient and automated

9

10market;

11 (b) As a regulated issuer, Insight filed periodic public reports with the SEC

12 and the NSADAQ;

13 (c) Insight regularly communicated with public investors via established

14market communi cati on mechani sms, including tlu-ough regular

15disseminations of press releases on the national circuits of major newswire

16

17services and through other wide-ranging public disclosures, such as

18 communications with the financial press and other similar reporting

19 services; and

20 (d) Insight was followed by several securities analysts employed by major

21 brokerage firms who wrote reports which were distributed to the sales

22force and certain customers of their respective brokerage firms. Each of

23these

24

25reports was publicly available and entered the public marketplace.

26 66. As a result of the foregoing, the market for Insight's securities promptly

27 digested current information regarding Insight from all publicly-available sources and reflected

28 such information in the price of Insight's securities. Under these circumstances, all purchasersCOHEN, MILSTEIN,



1 of Insight's securities during the Class Period suffered similar injury through their purchase of

2 Insight's securities at artificially inflated prices and a presumption of reliance applies.

3NO SAFE HARBOR

4

67. The statutory safe harbor provided for forward-looking statements under certain5

6circumstances does not apply to any of the allegedly false statements pleaded in this

7 Complaint. Many of the specific statements pleaded herein were not identified as "forward-

8 looking statements" when made. To the extent there were any forward-looking statements,

9 there were no meaningful cautionary statements identifying important factors that could cause

10 actual results to differ materially from those in the purportedly forward-looking statements.

11Alternatively, to the extent that the statutory safe harbor does apply to any forward-looking

12statements pleaded herein, defendants are liable for those false forward-looking statements

1314 because at the time each of those forward-looking statements was made, the particular speaker

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

16 statement was authorized and/or approved by an executive officer of Insight who knew that

17 those statements were false when made.

18FIRST CLAIM

19 Violation of Section 10(b)ofThe Exchange Act and Rule 10b-5

20 Promulgated Thereunder Against All Defendants

21 68. Plaintiff repeats and realleges each and every allegation contained above as if

22fully set forth herein.

23

69. During the Class Period, defendants carried out a plan, scheme and course of24

25conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

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

27 and other members of the Class to purchase Insight's securities at artificially inflated prices. In

28 furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them,COHEN, MILSTEIN,



1 took the actions set forth herein.

2 70. The defendants (i) employed devices, schemes, and artifices to defraud; (ii)

3made untrue statements of material fact and/or omitted to state material facts necessary to

4make the statements not misleading; and (iii) engaged in acts, practices, and a course of

5

6business which operated as a fraud and deceit upon the purchasers of the Company's securities

7 in an effort to maintain artificially high market prices for Insight's securities in violation of

8 Section 10(b) of the Exchange Act and Rule 10b-5. All defendants are sued either as primary

9 participants in the wrongful and illegal conduct charged herein or as controlling persons as

10 alleged below.

11

71. The defendants, individually and in concert, directly and indirectly, by the use,12

means or instrumentalities of interstate commerce and/or of the mails, engaged and1314 participated in a continuous course of conduct to conceal adverse material information about

15 Insight's financial wellbeing, as specified herein.

16 72. These defendants employed devices, schemes and artifices to defraud, while in

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

18course of conduct as alleged herein in an effort to assure investors of Insight's value and

19performance and continued substantial growth, which included the making of, or the

20

21participation in the making of, untrue statements of material facts and omitting to state material

22 facts necessary in order to make the statements made about Insight and its financial results in

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

24 particularly herein, and engaged in transactions, practices and a course of business which

25 operated as a fraud and deceit upon the purchasers of Insight's securities during the Class

26Period.

27

73. Each of the Individual Defendants' primary liability, and controlling person28

COHEN, MILSTEIN,



I liability, arises from the following facts: (i) the Individual Defendants were high-level

2 executives and/or directors at the Company during the Class Period and members of the

3Company's management team or had control thereof; (ii) each of these defendants, by virtue of

4their responsibilities and activities as a senior officer and/or director of the Company, was

5

6privy to and participated in the creation, development and reporting of the Company's internal

7 budgets, plans, projections and/or reports; (iii) each of these defendants enjoyed significant

8 personal contact and familiarity with the other defendants and was advised of, and had access

9 to, other members of the Company's management team, internal reports and other data and

10 information about the Company's finances, operations, and sales at all relevant times; and (iv)

11each of these defendants was aware of the Company's dissemination of information to the

12investing public which they knew or recklessly disregarded was materially false and

13

14misleading.

15 74. The defendants had actual knowledge of the misrepresentations and omissions

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

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

18Such defendants' material misrepresentations and/or omissions were done knowingly or

19recklessly and for the purpose and effect of concealing Insight's financial well-being, from the

20

21investing public and supporting the artificially inflated price of its securities. As demonstrated

22 by defendants' overstatements and misstatements of the Company's financial well-being,

23 throughout the Class Period, defendants, if they did not have actual knowledge of the

24 misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by

25 deliberately refraining from taking those steps necessary to discovery whether those

26statements were false or misleading

27

75. As a result of the dissemination of the materially false and misleading information28


TTORNFYS AT AW


I and failure to disclose material facts, as set forth above, the market price of Insight's securities

2 was artificially inflated during the Class Period. In ignorance of the fact that market prices of

3Insight's securities were artificially inflated, and relying directly or indirectly on the false and

4misleading statements made by defendants, or upon the integrity of the market in which the

5securities trades, and/or in the absence of material adverse information that was known to or

6

7 recklessly disregarded by defendants, but not disclosed in public statements by defendants during

8 the Class Period, Plaintiff and the other members of the Class acquired Insight's securities during

9 the Class Period at artificially high prices and were damaged thereby.

10

76. At the time of said misrepresentations and omissions, Plaintiff and other members

11of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff and the

12other members of the Class and the marketplace known the truth regarding the problems that

1314 Insight was experiencing, which were not disclosed by defendants, Plaintiff and other members

15 of the Class would not have purchased or otherwise acquired their Insight securities, or, if they

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

17 artificially inflated prices which they paid.

18

77. By virtue of the foregoing, defendants have violated Section 10(b) of the

19Exchange Act and Rule 10b-5 promulgated thereunder.

20

2178. As a direct and proximate result of defendants' wrongful conduct, Plaintiff and

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

23 and sales of the Company's securities during the Class Period.

24 SECOND CLAIMViolation of Section 20(a) of

25 The Exchange Act Against the Individual Defendants

26

79. Plaintiff repeats and realleges each and every allegation contained above as if27

fully set forth herein.28

COHEN, MILSTEIN,



1 80. The Individual Defendants acted as controlling persons of Insight within the

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

3positions, and their ownership and contractual rights, participation in and/or awareness of the

4Company's operations and/or intimate knowledge of the false financial statements filed by the

56 Company with the SEC and disseminated to the investing public, the Individual Defendants

7 had the power to influence and control and did influence and control, directly or indirectly, the

8 decision-making of the Company, including the content and dissemination of the various

9 statements which Plaintiff contends are false and misleading. The Individual Defendants were

10 provided with or had unlimited access to copies of the Company's reports, press releases,

11public filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly

12after these statements were issued and had the ability to prevent the issuance of the statements

13

14or cause the statements to be corrected.

15 81. In particular, each of these defendants had direct and supervisory involvement in

16 the day-to-day operations of the Company and, therefore, is presumed to have had the power to

17 control or influence the particular transactions giving rise to the securities violations as alleged

18herein, and exercised the same.

19

82. As set forth above, Insight and the Individual Defendants each violated Section20

2110(b) and Rule 10b-5 by their acts and omissions as alleged in this Complaint. By virtue of

22 their positions as controlling persons, the Individual Defendants are liable pursuant to Section

23 20(a) of the Exchange Act. As a direct and proximate result of defendants' wrongful conduct,

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

25 of the Company's securities during the Class Period.

26WHEREFORE, Plaintiff prays for relief and judgment, as follows:

27

28COHEN, MILSTEIN,



1 (a) Determining that this action is a proper class action under Rule 23 of the Federal

2 Rules of Civil Procedure;

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

4members against all defendants, jointly and severally, for all damages sustained as

5

6a result of defendants' wrongdoing, in an amount to be proven at trial, including

7 interest thereon;

8 (c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

9 this action, including counsel fees and expert fees; and

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

11

12JURY TRIAL DEMANDED

13Plaintiff hereby demands a trial by jury.

14

15Dated April 23, 2009

Respectfully submitted,

16

17 By: /s/ Matthew K. Handley Matthew K. Handley

18 Steven J. TollDaniel S. Sommers

19 COHEN MILSTEIN SELLERS& TOLL PLLC

20 1100 New York Avenue, N .W.West Tower, STE 500

21 Washington, D.C. 20005-3964Telephone: 202-408-4600

22 Facsimile: 202-408-4699

23

24

25

26

27

28COHEN, MILSTEIN,



1

2 By: /s/Ron Kilgard

3 Ron KilgardKELLER ROHRBACK, P.L.C.

4 3101 North Central Avenue, Suite 1400Phoenix, Arizona 85012

5 Telephone: 602-248-0088Facsimile: 602-248-2822

6

7 Lynn Lincoln SarkoJuli E. Farris

8 KELLER ROHRBACK L.L.P.1201 Third Avenue, Suite 3200

9 Seattle, Washington 98101Telephone: 206-623-1900

10 Facsimile: 206-623-3384

11 Attorneys for Plaintiff

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28COHEN, MILSTEIN,


Case 2:09-cv-00856-SRB Document 1-2 Filed 04/23/2009 Pagel of 1

CERTIFICATION OF PLAINTIFFPURSUANT TO FEDERAL SECURITIES LAWS

1, —V tc4 ITR kft-Rpol , ("Plaintiff') declare, as to the claims assertedunder the federal securities laws, that:

1. I have reviewed a class action complaint asserting securities claims against InsightEnterprises, Inc. (NSIT), and wish to join as a plaintiff retaining Cohen Milstein Sellers & Toll, PLLC asmy counsel.

2. Plaintiff did not purchase the security that is the subject of this action at the direction ofplaintiffs counsel or in order to participate in this private action.

3. Plaintiff is willing to serve as a representative party on behalf of the class, includingproviding testimony at deposition and trial, if necessary.

4. My transactions in Insight Enterprises, Inc. (NSIT) during the Class Period were asfollows:

DATE TRANSACTION (buy/sell) NO. OF SHARES PRICE PER SHARE

IZ6/07 Buy 5'16 .513

5. During the three years prior to the date of this Certificate, Plaintiff has not sought to serveor served as a representative party for a class in any action under the federal securities laws except asfollows:

6. Plaintiff will not accept any payment for serving as a representative party on behalf of theclass beyond plaintiffs pro rata share of any recovery, except such reasonable costs and expenses(including lost wages) directly relating to the representation of the class as ordered or approved by thecourt.

I declare under penalty of perjury that the foregoing true and correct.

Executed this 15 Day of APA-i

is\ Alti /009.. 41/4147

•

Case 2:09-cv-00856-SRB Document 1-3 Filed 04/23/2009 Page 1 of 1.JS 44 (Rev. 12/07) CIVIL COVER SHEETThe JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service ofpleadings or other papers as required by law, except as providedby local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the purpose of initiatingthe civil docket sheet (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM)

1. (a) PLAINTIFFS DEFENDANTS

DIMITRIY KARPOV, Individually and On Behalf of All Others INSIGHT ENTERPRISES, INC., TIMOTHY A. CROWN,Similarly Situated gi RICHARD A. FENNESSY, STANLEY LAYBOURNE, GLYNIam

(b) County of Residence of First Listed Plaintiff Maricooa County of Residence of First Listed Defendant Maricopa (EXCEPT IN US. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)

NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF THELAND INVOLVED.

(g) Attorney's (Firm Name, Address, and Telephone Number) Attorneys Of Knovm)

KELLER ROHRBACK, P.L.C., 3101 North Central Avenue, Suite1400, Phoenix, Arizona 85012; Tel: 602-248-0088 la

II. BASIS OF JURISDICTION (Place an "X" in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES(P120: an "X" in One Box for PlaintiffFor Diversity Cases Only) and One Box for Defendant)

0 I US. Government is 3 Federal Question PTF DER PTF DEFPlaintiff (U.S. Government Not a Party) Citizen of This State X 1 0 1 Incorporated or Pnncipal Place 0 4 X 4

of Business In This Slate

0 2 U.S. Govemmem 0 4 Diversity Citizen of Another State 0 2 0 2 Incorporated and Principal Place 0 5 0 5Defendant

of Business In Another State(Indicate Citizenship of Parties in Item 111)

Citizen or Subject of a 0 3 0 3 Foreign Nation 0 6 0 6Foreign. Comte

IV. NATURE OF SUIT 'lace ein"X" in One Box a

110 Insurance PERSONAL INJURY PERSONAL INJURY 0 610 Agriculture 0 422 Appeal 28 USC 158 0 400 State Reapportionment120 Marine 0 310 Airplane 0 362 Personal Injury - 0 620 Other Food & Drug 0 423 Withdrawal 0 410 AXIMILSt

130 Miller Act 0 315 Airplane Product Med. Metal:laic° 0 625 Drug Related Seizure 28 USC 157 0 430 Banks and Banking140 Negotiable Inswurnent Liability 0 365 Personal injury - of Property 21 USC 881 0 450 Commerce150 Recovery of Overpayment 0 320 Assault, Libel & Product Liability 0 630 Liquor Laws !Mannar 0 460 DelsutalI04

&Enforcement of Judgment Slander 0 368 Asbestos Personal 0 640 R.R. & Truck 0 820 Copyrights 0 470 Racketeer Influenced and151 Medicare Act 0 330 Federal Employers Injury Product 0 650 Airline Regs. 0 830 Patent Corrupt Organizations152 Recovery of Defaulted Liability Liability 0 660 Occupational 0 840 Trademark 0 480 Consumer Credit

Student Loans 0 340 Manic PERSONAL PROPERTY Safety/Health 0 490 Cable/Sat TV(Excl. Veterans) 0 345 Marine Product 0 370 Other Head 0 690 Other 0 810 Selective Service

0 153 Recovery of Ovemaytnent Liability 0 371 Truth in Lending X 850 Securitatt/Commodities/of Vetam's Benefits 0 350 Motor Vehicle 0 380 Other Personal 0 710 Fair Labor Standards 0 861 H1A (1395ff) Exchange

0 160 Stockholders' Suits 0 355 Motor Vehicle Property Damage Act 0 862 Black Lung (923) 0 875 Customer ChallengeO 190 Other Contract Product Liability 0 385 Property Damage 0 720 Labor/Mgmt. Relations 0 863 DIWC/D1WW (405(g)) 12 USC 3410O 195 Contact Product Liability 0 360 Other Pernonal Product Liability 0 730 Labor/Mgmt.Reporting 0 864 SSD Title XVI 0 890 Other Statutory ActionsO 196 Franchise : . & Disclosure Act 0 865 RSI 405: 0 891 Agricultural Acts

0 210 Land Condemnation 0 441 Voting 0 510 Motions to Vacate 0 790 Other Labor Litigation 0 870 Taxes (U.S. Plaintiff 0 893 Enyircannental M:Mers0 220 Foreclosure 0 442 Employment Sentenr,e 0 791 Empl. Rel. Inc. or Defendant) 0 894 Energy Allocation Act0 230 Rent Lease & Ejectment 0 443 Housing/ Habeas Corpus: Security Act 0 871 IRS—Third Party 0 895 Freedom of Information0 240 Torts to Land Accommodations 3 530 General 26 USC 7609 Act0 245 Tort Product Liability 0 444 Welfare 3 535 Death Paudty 1 0 900Appeal of Fee Determination0 290 All Other Real Progeity 0 445 Amer. w/Disabilities - 3 540 Mandiaran & Other • 4. N ration - • • ration Under Equal Access

EIIIIII0Sment 3 550 Civil Rights 0 463 Habeas Corpus - to JusticeO 446 Amer. w/Disabilities - 0 555 Risen Condition Alien Detainee 0 950 Constitutionality of

Other 0 465 Other Immigration State StatutesO 440 Other Civil Rights Actions

V. ORIGIN (Place an"' in One Box Only) Aural to Dis/rict21 Original 0 2 Removed from 0 3 Remanded from 0 4 Reinstated or 0 5 Transferred from 0 6 Multidistrict 0 7

Proceeding State Court Appellate Court Reopened another districtDimciA9

Litigationincrement

Cite the U.S. CiviL Statute under which you.are filing (Op Apt cite Jurisdittionalitatutes unteisillyersitvl .rursuant to sec. Zr or me ffxcnange AGE (10 U.b.l.:. sec. (brae) ana as u.s.u. Sec. 13.31.

VI. CAUSE OF ACTION Brief description of conve:Gommoti law misrepresentations and traud

VII. REQUESTED IN CI CHECK w THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:

COMPLAINT: UNDER F.R.C.P. 23 JURY DEMAND: el Yes 0 No

VHI. RELATED CASE(S)(See instructions):

IF ANY JUDGE DOCKET NUMBER

DATE SIGNATURE OF ATTORNEY OF RECORD

04/23/2009 Ron KilgardFOR OFt10E USE ONLY

RECEIPT II AMOUNT APPLYING IFP JUDGE MAO, 1130438

Case 2:09-cv-00856-SRB Document 14 Filed 04/23/2009 Page 1 of2

c1U4A0 440 (Rev. 8/01) Summons in a Civil Action

UNITED STATES DISTRICT COURT

Distridof Arizona

DIMITRIY KARPOV, Individually and On

Behalf of All Others Similarly Situated, SUMMONS IN A CIVIL CASEV.

INSIGHT ENTERPRISES, INC., TIMOTHY

A. CROWN, RICHARD A. FENNESSY, CASE

STANLEY LAYBOURNE, GLYNIS A. BRYAN,

KAREN K. McGINNIS, LARRY A. GUNNING,

ERIC J. CROWN, ROBERTSON C. JONES,

MICHAEL M. FISHER, BENNETT DORANCE, KATHELEEN

S. PUSHOR and DAVID J. ROBIN°

TO: (Name and address of Defendant)

INSIGHT ENTERPRISES, INC . , TIMOTHY A . CROWN, RICHARD A. FENNE S SY ,

STANLEY LAYBOURNE , GLYN I S A. BRYAN, KAREN K. Mc G I NN I S , LARRY A. GUNNING,

ERIC J. CROWN, ROBERTSON C. JONES, MICHAEL M. FISHER, BENNETT DORANCE ,

KATHE LEEN 5. PUSHOR and DAVID J. ROBIN°

YOU ARE HEREBY SUMMONED and required to serve on PLAINTIFF S ATTORNEY (name and address)

Ron Kilgard

Keller Rohrback, P . L . C .

3101 North Central Avenue

Suite 1400

Phoenix, Arizona 85012

an answer to the complaint which is served on you with this summons, within 20 days after serviceof this summons on you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you forthe relief demanded in the complaint. Any answer that you serve on the parties to this action must be filed with the Clerk of thisCourt within a reasonable period of time after service.

CLERK DATE

(By) DEPUTY CLERK

Case 2:09-cv-00856-SRB Document 1A Filed 04/23/2009 Page 2 of 2

c1a4A0 440 (Rev. 8/01) Suirmions in a Civil Action

RETURN OF SERVICEDATE

Service of the Summons and complaint was made by Mel

NAME OF SERVER (PRINT) TITLE

Check one box below to indicate appropriate method of service

O Served personally upon the defendant. Place where served:

O Left copies thereof at the defendant's dwelling house or usual place of abode with a person of suitable age anddiscretion then residing therein.

Name of person with whom the summons and complaint were left:

O Returned imexecuted:

O Other (specify):

STATEMENT OF SERVICE FEES

TRAVEL SERVICES TOTAL

DECLARATION OF SERVER

I declare under penalty of perjury under the laws of the United States of America that the foregoing informationcontained in the Return of Service and Statement of Service Fees is true and correct.

Executed onDate Signature of Server

Adafress of Server

(1) As to who may serve a summons see Rule 4 of the Federal Rules of Civil Procedure.

1 steven j. toll daniel s. sommers cohen milstein...

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