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Case ID: 5159 | Stocks | 08/13/2008
According to a press release dated August 7, 2008, the Complaint charges NovaGold and certain of its officers and directors with violations of the Securities Act of 1933 and Securities Exchange Act of 1934. NovaGold is engaged in the business of exploration and development of mineral properties. Throughout the Class Period, Defendants falsely portrayed NovaGold as a rapidly growing company on the verge of moving from a mid-tier exploration and development company to a mid-tier gold and copper production company by issuing a series of materially false and misleading statements regarding the costs, progress and viability of its multi-billion dollar Galore Creek project.
Specifically, the complaint alleges that the Class Period begins on October 25, 2006, when NovaGold issued a press release touting the results of a feasibility study performed by Hatch Ltd. ("Hatch") that purportedly "confirmed" the economic viability of the Galore Creek project. According to a statement made by the Company's President and CEO, Rick Van Nieuwenhuyse ("Nieuwenhuyse"), in the October 25, 2006 press release, "the Feasibility Study confirms that Galore Creek is one of the world's largest undeveloped copper-gold-silver projects with one of the lowest cash costs in the industry ...." The Feasibility Study estimated the capital costs for the Galore Creek project to be Cdn $2.2 billion. The Hatch Feasibility Study enabled the Company to successfully fend off a hostile takeover bid by mining giant Barrick Gold by maintaining the average closing price of the Company's shares above Barrick Gold's $16 per share tender offer. In fact, when fending off Barrick Gold's takeover bid Nieuwenhuyse assured shareholders "that at US$16, NovaGold shares are better than money in the bank." The Hatch Feasibility Study also allowed the Company to raise hundreds of millions of dollars in an April 2007 secondary stock offering, thus providing a strong motive for the Defendants to misrepresent the Hatch Feasibility Study as a bankable study. Throughout the Class Period, the Company regularly and systematically assured the investing public that the construction of the Galore Creek project was on schedule and on budget. On November 26, 2007, the Company shocked investors when it announced that it would suspend activities at Galore Creek based on the results of an updated feasibility study, which estimated the capital costs for the Galore Creek project to be Cdn $5 billion -- approximately 127 percent greater than Hatch had estimated in October 2006. Upon the release of this news, the Company's shares declined $10.76 per share, or more than 53 percent, to close on November 26, 2007 at $9.48 per share, on unusually heavy trading volume.
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 Concord Camera Corporation, a worldwide designer, developer, manufacturer and seller of image capture products (NASDAQ: LENS) and certain of its officers and directors by stockholders who purchased the company’s common stock between August 14, 2003 and May, 10, 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. Kahn Gauthier Swick, LLC ("KGS") announces that it has filed a class action lawsuit in the United States District Court for the Central District of California, Western Division on behalf of shareholders who purchased, exchanged or otherwise acquired the common stock and other securities of Broadcom Corporation ("Broadcom'' or the "Company'') (Nasdaq: BRCM -News) between July 21, 2005 and July 13, 2006.
Broadcom and certain of its offices and directors are charged with issuing a series of materially false and misleading statements in violation of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. On July 14, 2006, Broadcom announced that it would record more than $750 million in added expenses and restate its past earnings related to the illegal backdating of stock options. Prior to any news of options backdating reaching in the market, shares of Broadcom traded at slightly above $40.00 per share and, thereafter, shares traded down to approximately $27.50 per share - - a rapid decline of over 31%.
Options pricing backdating occurs when options grants to senior officers or directors of public companies are made at prices lower than the trading price of the stock on the date such options are granted. The undisclosed backdating of options violates generally accepted accounting principles.
If you wish to serve as lead plaintiff, you must move the Court no later October 12, 2006. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. If you would like to discuss your legal rights, you may e-mail or call KGS, without obligation or cost to you, or you may submit your information on this webpage to be reviewed by a lawyer. You may contact Managing Partner Lewis Kahn of KGS direct, toll free 1-866-467-1400, ext., 100, or 504-648-1850, or by email at lewis.kahn@kglg.com. “Market timing” would be okay if the investing public could take advantage of it, too. Several class actions have been filed against the Fremont Family of mutual funds (various stock symbols) and certain investment firms by investors who purchased fund shares between March 15, 1999, and March 1, 2004. The actions claim that the defendants violated federal securities laws by allowing the named investment firms to utilize market timing techniques to turn a quick profit to the disadvantage of all other fund investors. Several class actions have been filed against biopharmaceutical corporation Adolor Corporation (Nasdaq:ADLR) and certain of its officers and directors by stockholders who purchased the company's common stock between September 23, 2003, and January 14, 2004. The actions claim 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. On September 15, 2005, the parties reached a tentative settlement in several class actions that had been filed against wireless interactive entertainment provider KongZhong Corporation (Nasdaq:KONG) and certain of its officers and directors by stockholders who purchased the company's American Depositary Shares between July 9, 2004, and August 17, 2004. The actions claimed 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. A class action lawsuit has been filed on behalf of investors who traded in gold commodities between January 1, 1998 and the present against gold mine operator Barrick Gold Corporation and investment brokerage giant JP Morgan Chase & Co. The suit alleges that JP Morgan Chase and Barrick manipulated the gold market and artificially affected gold prices, to the financial harm of investors. |
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