A securities class action lawsuit was recently filed to represent purchasers of InvenSense, Inc.'s common stock.
InvenSense, Inc. is based in San Jose, California, and designs, builds and distributes Micro-Electro-Mechanical Systems sensors. These devices include gyroscopes, accelerometers and microphones for consumer electronics.
Rigrodsky & Long lawsuit
On Jan. 8, 2015, Rigrodsky & Long, P.A. announced that it had brought forth a lawsuit on the behalf of all organizations or individuals who bought the company's common stock between July 29, 2014, and Oct. 28, 2014. These dates are inclusive, and represent the class period.
The class action lawsuit, filed in the U.S. District Court for the Northern District of California, claimed that both the company – and certain officers – breached the Securities Exchange Act of 1934. The legal motion involved allegations that during the class period, defendants made statements and omissions regarding the MEMS producer's business, prospects and operations that were materially false and misleading.
Robbins Geller legal claim
Robbins Geller Rudman & Dowd LLP filed a separate lawsuit Jan. 7, representing a class including all individuals and organizations that bought InvenSense securities between July 29, 2014, and Oct. 28, 2014. This legal action alleged that the company and some of its officers violated the Securities Exchange Act of 1934.
The suit claimed that during the class period, the defendants provided statements pertaining to InvenSense's outlook and financial performance that were materially false and misleading. More specifically, the legal action alleged that these parties failed to reveal how the agreement the company made with Apple – which involved the technology giant supplying sensors for the iPhone 6 and iPhone 6 plus at reduced prices – would impact InvenSense.
The company's margins were negatively affected as a result of the low prices it charged Apple, according to the suit. Additionally, the legal action claimed that defendants chose to release robust guidance instead of revealing these adverse matters to investors.
The Rigrodsky & Long lawsuit further claimed that while the company ran into bottlenecks and difficulties in its manufacturing that undermined profit margins, defendants failed to reveal this key information. As a result of the aforementioned, the suit alleged that the company and its officers did not have any reasonable basis for the near-term financial guidance they provided or ensuring investors that profit performance would continue to linger near historical levels.
The legal action also alleged that when Form 10-Q was filed for the first quarter of 2014, the document failed to reveal several key matters. These important pieces of information included the events, trends and uncertainties relating to the company's sales and margins that were likely to have a significant impact on the company's future operating results.
Finally, the suit claimed that during the class period, defendants lacked a reasonable basis for all the positive communications given about InvenSense's outlook and financial performance during the time. The company's stock traded at artificially inflated prices during the class period as a result of the false and misleading statements allegedly made by defendants.
According to the Robbins Geller suit, the MEMS producer's common shares rose to $25.85 during the class period because of the defendant's false and misleading statements, and/or omissions. The legal action claimed that as a result of this situation, company insiders generated more than $5.3 million in aggregate proceeds when they sold their personally held stock.
Subpar financial results
On Oct. 28, 2014, InvenSense provided financial results for the quarter ending Sept. 28, 2014. Because of a charge involving old inventory, low prices charged to customers and operational difficulties, the MEMS producer revealed that its margins fell substantially.
Company shares proceeded to drop more than 25 percent, finishing the session on Oct. 29, 2014 at $16.08 each, the Rigrodsky class action lawsuit noted.
Investor information
Rigrodsky & Long, P.A.has indicated that investors who bought InvenSense shares during the class period, or bought these securities beforehand and still hold them, should contact Timothy MacFall or Peter Allocco. The law firm also notified eligible investors that they have until March 9, 2015, to move the court in an attempt to serve as lead plaintiff.
Robbins Geller stated that investors who would like more information can reach out to Samuel Rudman or David Rosenfeld, and individuals and organizations that would like to serve as lead plaintiff have until no later than 60 days following the announcement on Jan. 7 to move the court.