While most people are celebrating the holidays with family and co-workers this month, Taleo, the provider of talent management software, has little reason to rejoice.

The company has experienced a steady string of setbacks, beginning with their Q3 financial call and continuing with a bevy of lawsuits that threaten to rattle the core of this globally renowned company.

Here’s what’s happened so far:

On November 3, the company reported disappointing Q3 earnings, showing that net income went from $2,233 million in Q3 2007 to a net loss of $ (8,151) in Q3 2008, due in part to the acquisition of Vurv Technology and disproportionate sales and marketing costs in relation to revenue.

On November 10, Taleo notified the SEC that its financial filings would be late while auditors Deloitte and Touche asked to re-evaluate the firm’s revenue recognition process.

On November 17, Taleo was hit with a class action lawsuit by Johnson and Perkins, a Vermont-based firm that alleges the company misled or failed to inform the investing public regarding their historical and current accounting practices with respect to the timing for recognition of application and consulting revenues.

On November 18, NASDAQ notified Taleo that it was no longer in compliance with listing requirements due to the delay in reporting their financial filings to the SEC.

On November 21, the law firm Hagens Berman Sobol Shapiro LLP announced they are investigating potential securities fraud action against Taleo. According to BusinessWire, the firm will investigate whether Taleo and/or its executives conducted “extensive insider selling while improperly recognizing revenues by the Company’s leadership.”

Also on the same day, the law firm Bull & Lifshitz, LLP filed suit against Taleo and its executives, also claiming that the defendants misled or failed to inform the investing public historical and current accounting practices with respect to the timing for recognition of application and consulting revenues under generally accepted accounting principles in the United States.

Other law firms, including the Brualdi Law Firm, P.C. have announced similar lawsuits in the wake of the financial filings delay AND the alleged insider selling.

ZDNet writer Brian Sommers gave his own analysis of Taleo’s current situation and what repercussions may surface:

Apparently, some Taleo executives sold off shares of stock they owned in Taleo. In the last six months, insiders apparently sold approximately $10.8 million in Taleo shares. However, the law firm is reporting that insiders have sold approximately $121 million since the company went public in 2005. My math tells me that insiders have been selling a lot more stock in earlier years than they have in this last year of 2008. Does this suggest a smoking gun? I’m not so sure. Many software executives have pre-arranged sell orders with brokerages so that these individuals can make their investment liquid and/or diversify their holdings. Most executives have these plans as the planned schedule of sales is known and controlled by the brokerage and not the executive. This is done to prevent the appearance (or reality) of insider trading. Given the magnitude of prior sales, this may be a dubious claim if the sales were triggered by third parties.

The real issue here will be whether revenue was incorrectly recorded, the magnitude of the recording error, if any, and how it will affect the published financials. Given the time-intensive nature of these auditing/accounting reviews, this could be more than a year and maybe up to several years before it is resolved. The faster Taleo and Deloitte can get through this, the better for Taleo and its executives.

Does any of this reflect poorly on Taleo’s products or the Vurv solutions they purchased? No. Will it be a management distraction? Yes. Will it cost a lot of money? Absolutely. Will competitors bring this up in selling situations? Bet on it.