A class action has been filed against Taser International Inc. (NASDAQ: TASR), an AZ based manufacturer of Taser guns, and certain of its officers and directors by stockholders who purchased the company's common stock between November 4, 2004 and January 6, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

Specifically, the complaint alleges that the defendants issued many false statements concerning the demand for their products and the positive results of studies regarding their products. More specifically, the complaint alleges:

• that, contrary to defendants' representations, the studies conducted on the Company's Taser devices were inconclusive as to the safety of the devices;
• that the Company's revenues and earnings would be negatively impacted once the truth of these studies became known;
• that the "last minute" order of Taser devices the Company had received from one of its distributors was done to help the Company meet its sales goals for the quarter and was not indicative of the true demand for the Company's products; and
• based on the foregoing, defendants had no reasonable basis for their positive statements regarding the safety of, and demand for, the Company's products.

On January 6, 2005, the Company disclosed that they were in receipt of an informal inquiry letter from the Securities and Exchange Commission regarding the Company's statements about the safety of its products and a recent order received from one of its distributors. This disclosure caused the Company's stock to fall by 18%.