A class action has been filed against Dana Corporation (DCN), certain of its officers and directors by stockholders who purchased the company's common stock between March 23, 2005 and September 14, 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.

Several purported shareholder class action lawsuits have been filed against Dana Corporation and certain of its executive officers and directors alleging violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that by the beginning of the Class Period, Dana's profits were being negatively impacted by an increase in the price of raw materials - steel, in particular - which was disconcerting to investors. In order to assure the market that the Company's business was performing according to plan, and would continue to perform well even if steel prices did not decline materially, defendants artificially inflated Dana's net income through improper accounting and, in addition, issued earnings guidance that lacked any reasonable basis given the Company's true performance and prospects, which were known to defendants but not the investing public. In particular, defendants' Class Period representations regarding Dana's historical financial performance and condition and its expected 2005 earnings were materially false and misleading because: (a) the Company had improperly accounted for price increases, which materially artificially inflated its second quarter of 2005 income; (b) the Individual Defendants' assurances, made in written certifications filed with the SEC, that the second quarter Form 10-Q was free from misstatements and fairly presented the Company's financial condition and results of operations was patently false; (c) the Company's apparent success was the result of improper accounting, did not reflect the reality of its business and deceived investors; and (d) in light of these facts, which were known to defendants, defendants' guidance lacked any rational basis and could not be met without a material drop in raw material prices, contrary to defendants' repeated assurances to the contrary.

The complaint further alleges that on or around September 15, 2005, before the open of ordinary trading, Dana issued a press release announcing that it would likely restate second quarter 2005 financial results and that it had dramatically lowered its 2005 earnings guidance, to $0.60 to $0.70 per share from $1.30 to $1.45, a more than 100% reduction. Because of the expected earnings shortfall, the Company may have to write down its U.S. deferred tax assets and may be in violation of covenants contained in a loan agreement, according to the press release. A main reason given for the halving of the 2005 guidance was high steel costs, a factor that defendants repeatedly assured the market was already considered, and accounted for, in the guidance.

In reaction to this announcement, the price of Dana stock fell dramatically, from $12.78 per share on September 14, 2005 to $9.86 per share on September 15, 2005, a one-day drop of 22.8% on unusually heavy trading volume.

If you bought Dana Corporation securities between March 23, 2005 and September 14, 2005, inclusive, and would like to obtain information about the Dana Corporation lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.