Stockholders v Immersion Corporation
Stockholders File Lawsuit Against Immersion Corporation
The complaint charges the Defendants and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Defendants are a provider of haptic technologies, which allow people to use their sense of touch while operating a variety of digital devices.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Companys transactions in its Medical line of business. Specifically, defendants failed to disclose that Defendants revenue recognition practices in its Medical line of business were improper. As a result of defendants false and misleading statements, Defendants stock traded at artificially inflated prices during the Class Period, reaching a high of $20.50 per share on July 13, 2007. Subsequently, in February 2008, Defendants announced a correction of its income tax expense for its interim 2007 results, causing the Companys stock to drop somewhat, but the stock continued to trade at artificially inflated levels due to the Companys reported profitability. Then, on July 1, 2009, before the market opened, the Company issued a press release announcing that the Audit Committee of the Companys Board was conducting an internal investigation into certain previous revenue transactions in its Medical line of business. On this news, Defendants stock dropped over 23% from a close of $4.94 per share on June 30, 2009 to a close of $3.80 per share on July 1, 2009.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) the Companys revenue recognition practices with respect to its Medical line of business did not comply with Generally Accepted Accounting Principles; and (b) the Companys reported revenue and earnings were overstated due to the Companys false accounting.
If you bought Immersion Corporation securities and would like to obtain information about the Immersion Corporation lawsuit, then you are invited to call Kahn Swick & Foti, LLC toll free at (866) 467-1400 extension 100 to speak with an attorney or visit www.ksfcounsel.com.
