Pomerantz Law files class action against SemiLEDs
One of the complaints alleges the company was experiencing known, but undisclosed, pricing pressures for its products which could result adversely on SemiLEDs' future revenues and operating income
Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against SemiLEDs Corporation and some of its officers.
The class action, filed in United States District Court, Southern District of New York, on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of SemiLEDs between December 9th, 2010 and July 12th, 2011 both dates inclusive (the 'Class Period').
This class action seeks to recover damages against SemiLEDs and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated there under.
Shareholders who purchased SemiLEDs securities during the Class Period have until September 9th, 2013 to ask the court to appoint them as Lead Plaintiff for the class.
SemiLEDs Corporation develops, manufactures, and sells LED chips and components. The firm's products are used primarily for general lighting applications, including street lights and commercial, industrial, and residential lighting, as well as specialty industrial applications, such as ultraviolet (UV) applications, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, and LED lighting for horticulture applications.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business prospects, and operations. Specifically, the complaint alleges, among other things, that SemiLED misrepresented and failed to adequately disclose:
(a) that the company was experiencing known, but undisclosed, pricing pressures for its products which were reasonably likely to result in a material adverse effect on SemiLEDs' future revenues and operating income;
(b) that SemiLED failed to disclose known events or uncertainties, including the reduction in demand for its products, the loss of a large customer, and the decline in the value of its inventory that had or were reasonably likely to cause SemiLEDs' financial information not to be indicative of future operating results; and (c) that the Company had filed a false and misleading Registration Statement and Forms 10-Q with the SEC.
On July 10th, 2011, SemiLEDs issued a press release announcing its financial results for its 2011 third quarter ended May 31st, 2011. For the quarter, the company reported revenue of $5.6 million, down 43% from the previous year's third quarter, and a net loss of $5.1 million, or $0.19 per diluted common share.
SemiLEDs' results for the quarter were adversely impacted by a $1.1 million inventory charge during the quarter, an amount equal to more than 7 percent of the value of the Company's total inventory at February 28, 2011. On this new announcement, SemiLEDs' stock price fell nearly 11%, or $0.71 per share, to close at $5.87 per share on July 12th, 2011.