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Case ID: 4867 | Stocks | 07/11/2006
A class action has been filed against Herley Industries, Inc. (HRLY), certain of its officers and directors by stockholders who purchased the company's common stock between October 1, 2001 and June 14, 2006. 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.
According to a press release dated June 15, 2006, the Complaint charges Herley and certain of its officers and directors with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (a) that the Company's financial results were achieved through illegal conduct, specifically the misrepresentation of manufacturing costs on contracts with the U.S. Government and the falsification of a bid in order to win the award of a contract; (b) that the Company lacked adequate internal controls; and (c) that, as a result of the foregoing, the Company would likely be subject to enhanced governmental scrutiny, governmental fines for improper conduct, and the Company's ability to receive new contract awards from the U.S. Government and its ability to reap future revenues would be in serious doubt. On June 5, 2006, the Company announced that its fiscal 2006 third quarter earnings would be below Company expectations and analyst consensus estimates. Curiously, the Company made no mention of an impending indictment against the Company and its Chairman, Lee N. Blatt, and its effect on the Company's present and future prospects. Upon this announcement, shares of Herley fell $1.88 per share, or approximately 10 percent, to close at $17.50 per share, on heavy trading volume. On June 6, 2006, the Company revealed that the U.S. Attorney's office for the Eastern District in Pennsylvania had indicted the Company and its Chairman Lee N. Blatt on multiple charges in connection with excessive profits improperly earned by the Company on three contracts with the U.S. Department of Defense. Upon this announcement, shares of Herley fell $0.98 per share, or 6 percent, to close at $16.52 per share, on heavy trading volume. Shares of Herley stock continued to decline on the next trading day as news leaked out on the details of the indictment. On the next trading day, June 7, 2006, shares of the Company's stock fell an additional $1.48 per share, or 9 percent, to close at $15.04 per share, on heavy trading volume. Subsequently, on June 9, 2006, the Company announced that Lee N. Blatt resigned as Chairman of the Board and as a director of the Company on June 8, 2006. On June 13, 2006, the Company announced that its operations in Lancaster, Pennsylvania, Woburn, Massachusetts, Chicago, Illinois and Herley's subsidiary in Farmingdale, New York were suspended from receiving new contract awards from the U.S. Government. Following this announcement, shares of Herley plunged $5.19 per share, or 34 percent, to close at $10.06 per share, on heavy trading volume. On June 14, 2006, the Company issued a press release announcing its financial results for the fiscal third quarter of 2006, the period ended April 30, 2006. The Company also announced that its quarterly report on form 10-Q would be delayed since its auditors need to complete its review of procedures in connection with the Company's recent indictment. Upon this announcement, shares of Herley continued to fall, losing an additional $0.85 per share, or 8 percent, to close at $9.21 per share, on heavy trading volume. If you bought Herley Industries, Inc. securities between October 1, 2001 and June 14, 2006, inclusive, and would like to obtain information about the Herley Industries, Inc. lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest A class action has been filed against Guidant Corporation (GDT), certain of its officers and directors by stockholders who purchased the company's common stock between December 15, 2004 and November 3, 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. A class action has been filed in the Central District Court of California against Hienergy Technologies, Inc., a California based chemical technology company, (HIET.OB), and certain of its officers and directors by stockholders who purchased the company's common stock between February 22, 2002 and July 8, 2004. 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. A class action has been filed against Zale Corporation (ZLC), certain of its officers and directors by stockholders who purchased the company's common stock between February 18, 2005 and May 5, 2006. 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. A class action has been filed against diversified manufacturing and service company Tyco International, Ltd (NYSE: TYC) and its CEO by stockholders who purchased the company's common stock between December 30, 2002, and March 12, 2003. The parties have reached a tentative $2.5 million settlement of a class action filed against respiratory therapy manufacturer Nellcor Puritan Bennett, Inc. (formerly Nasdaq: NELL), subsidiary of Tyco Healthcare/Mallinckrodt, and certain of its officers and directors by stockholders who purchased the company's common stock between September 29, 1995, and April 16, 1996. The actions claim that the defendants violated the California Corporations Code by issuing a series of material misrepresentations to the market over this time period for the purpose of inducing investors to buy the company’s stock. To recover under the settlement, a completed proof of claim postmarked no later than February 18, 2004, must be mailed to the claims administrator. A class action has been filed against Cray, Inc. (NasdaqNM:CRAY), certain of its officers and directors by stockholders who purchased the company's common stock between July 31, 2003 and May 12, 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. |
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