A class action has been filed against InfoSonics Corporation (IFO), certain of its officers and directors by stockholders who purchased the company's common stock between May 8, 2006 and June 12, 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 13, 2006, the complaint alleges that InfoSonics and its top officers engaged in a scheme to defraud InfoSonics investors in violation of the federal securities laws by reporting false financial results on May 8, 2006 for its first quarter ended March 31, 2006. Specifically, the Complaint alleges that defendants knew, or with deliberate recklessness disregarded, that the Company had improperly accounted for warrants issued in connection with a January 2006 private placement which enabled it to report net income of $1.738 million for that quarter. Before the market opened on Monday, June 12, 2006, InfoSonics shocked the market when it disclosed that it would need to restate its previously reported net income for the first quarter down to $1.173 million, a decrease of 32.5%, due to the improper accounting treatment of the warrants. InfoSonics stock immediately plunged more than 28% that day on extraordinarily high volume. The Complaint further alleges that, while in possession of material nonpublic information concerning InfoSonics accounting for the warrants, defendants sold massive amounts of their personal holdings between May 11, 2006 and June 7, 2006 for proceeds exceeding $3 million. Indeed, as the Company admitted in a Form 8-K filed on June 12, 2006 with the SEC, InfoSonics had determined by Monday, June 5, 2006 that it would need to restate its previously reported financial results because it had improperly accounted for the warrants. Nevertheless, its Chief Financial Officer and the President of the Company's Latin American operations continued to sell their personal InfoSonics stock even after that determination.

If you bought InfoSonics Corporation securities between May 8, 2006 and June 12, 2006, inclusive, and would like to obtain information about the InfoSonics Corporation lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.