Scott+Scott, LLC Filed First Fraud Class Case Against Diebold Inc. on December 13

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Clients counting on firm after news of alleged voting machine problems and corporate internal control issues.

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Scott+Scott, LLC (http://www.scott-scott.com), at the direction of clients, filed a securities fraud class action in the United States District Court for the Northern District of Ohio (05CV2873) against Diebold Inc. ("Diebold" or the "Company") and individual defendants.

According to the complaint, the Company allegedly lacked a credible state of internal controls and corporate compliance and remained unable to assure the quality and working order of its voting machine products. Presently, the class is defined in the complaint researched and drafted by Scott+Scott as those who purchased Diebold securities between October 22, 2003, and September 21, 2005, inclusive (the "Class Period"). However, any purchaser of Diebold securities can contact the firm as the Class Period may change as information is revealed. Diebold engages in the development, manufacture, sale, and service of systems, software, and various products used to equip bank facilities such as automatic teller machines and other devices such as voting machines. On December 12, 2005, chief executive Walden O'Dell stated that he is resigning for personal reasons and named Thomas Swidarski, president and chief operating officer, to replace him.

If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott for more information. Scott+Scott will provide class members with case materials, answer all questions regarding participation and rights and assist with other services the firm provides. There is no cost or fee to you. Contact Scott+Scott partner Neil Rothstein at 800/332-2259, ext. 22 or cell 619/251-0887. Scott + Scott, LLC has offices in Connecticut, Ohio and California.

The complaint alleges that defendants violated provisions of the United States securities laws causing shareholders to purchase Diebold securities at an artificially inflated price. It further alleged that the Company's false and misleading statements served to conceal the dimensions and scope of internal problems at the Company, impacting product quality, strategic planning, forecasting and guidance and culminating in false representations of astonishingly low and incredibly inaccurate restructuring charges for the 2005 fiscal year, which grossly understated the true costs and problems defendants faced to restructure the Company. The complaint also alleges over $2.7 million of insider trading proceeds obtained by individual defendants during the Class Period.

Finally, investors learned the truth about the adverse impact of the Company's alleged defective and deficient inventory-related controls and systems on Diebold's financial performance. As a result of defendants' alarming disclosures of September 21, 2005, the price of Diebold shares plunged 15.5% on unusually high volume, falling from $44.37 per share on September 20, 2005, to $37.47 per share on September 21, 2005, for a one- day drop of $6.90 per share on volume of 6.1 million shares -- nearly eight times the average daily trading volume. On December 19, 2005, Diebold signed a deal with the Bank of China. Then on December 21, Bruce McPherson, California’s top election official, stated he would ask federal officials to test the software of the voting machines to see if they were vulnerable to hackers.

The plaintiff is represented by Scott+Scott, LLC, which has significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide. Cases currently being litigated and/or investigated by Scott+Scott, LLC include: Stone Energy; Bausch & Lomb; Bed Bath & Beyond; Guidant Corp.; Halliburton; SFBC, Int’l; Tuesday Morning, Bio-One Corp. and Faro Tech., among others. Its success has brought shareholders hundreds of millions of dollars in cases against Mattel, Royal Dutch/Shell, Sprint, ImClone, Emulex and others. Please contact the firm regarding any of these matters.

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Neil Rothstein
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