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Legato Execs Buck the Bears: Page 2 of 3

After Sept. 11, Wright figured three hot areas for information technology spending over the next few months would be contingency planning, security, and recovery software. The latter is a key part of Legato’s business.

He says Legato established a window of time that was not near the end of the quarter, so insiders could buy stock without violating SEC rules. He also points out he’s required to hold the stock at least six months.

In August and September, chief financial officer Andrew Brown bought 15,000 shares at prices from 5.15 to 8.50, increasing his stake to 26,218 shares. Also during that period, director David Strohm bought 230,000 shares at prices ranging from 5.13 to 8.18, boosting his holding to 435,000 shares. Strohm, a general partner at Greylock, says he purchased the stock for himself and his family, not for any Greylock fund.

Wright came on board a year ago as part of a management shakeup, following restated 1999 financial earnings and shareholder litigation. Some lawsuits are still pending. He believes the analysts who are still negative on the company are taking a wait-and-see approach with the new management.

Wright says his other holdings include Network Appliance Inc. (Nasdaq: NTAP) and Microsoft Corp.

(Nasdaq: MSFT).