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Once again, corporate insiders know the right time to sell.
The best time, of course, to sell is before bad news is
disclosed. In this instance, sellers who did well are the
insiders at Cooper Companies (NYSE: COO), and those
who suffered the most are the purchasers of COO stock
between July 29, 2004 and November 21, 2005, as well
as those investors who received Cooper Companies
shares in exchange for their shares of Ocular Sciences.
Specifically, among other things, it has been alleged that
Cooper Companies improperly accounted for assets
acquired in the Ocular Sciences mergers by misclassifying
intangible assets as tangible ones which had the effect of
lowering amortization expense. It is also alleged that
Cooper's aggressive earnings guidance reflected the
improper accounting for intangible assets and was
inflated by the amount of the understated amortization
expense. Moreover, it has alleged that the merger
synergies between Cooper Companies and Ocular
Sciences touted by Cooper Companies were unrealistic
and Ocular had stuffed the channel with its Biomedics
products lens market.
Before Thanksgiving last year, the truth began to
emerge. On November 22, 2005, Cooper fell
$21 per share, or 29%, to close at $51.47 per share
on November 22, 2005.
But some insiders at Cooper didn’t feel the same sting
in this drop that other investors felt. Specifically, during
the Class Period, insiders sold 1,970,233 shares of
common stock for proceeds of $141,492,613. They knew
when to sell.
Again, affected investors are those who purchased COO
between July 29, 2004 and November 21, 2005 and those
who received COO in exchange for their shares of
Ocular Sciences.
Chicago Bridge and Iron Update
At the end of last week a securities class action was filed
against Chicago Bridge & Iron Company N.V. (NYSE: CBI),
an international engineering, procurement, and construction
company, for allegedly making materially false and
misleading statements which caused Chicago Bridge's
securities to trade at artificially inflated prices during the
period between March 9, 2005 and February 3, 2006.
On October 26, 2005, Chicago Bridge issued a press release
announcing that it would be delaying the release of its third
quarter financial results because the results were not
"finalized in time to meet the original schedule". On
October 31, 2005, Chicago Bridge issued a press release
announcing a delay in its release of third quarter financial
results that was "precipitated by a memo from a senior
member of CB&I's accounting department alleging
accounting improprieties, including the determination of
claim recognition on two projects and the assessment of
costs to complete two projects."
Then, on February 3, 2006, after the close of the market,
Chicago Bridge issued a press release announcing the
terminations of the Company’s CEO and COO. Two hours
after the announcement of the terminations, an attorney
representing the former executives issued a press release
representing that they had been terminated in connection
with the Company's internal accounting investigation.
In response to these announcements, on February 6, 2006,
the price of Chicago Bridge stock dropped from
$29.00 per share to $22.33 per share on extremely heavy
trading volume.
Investors who purchased between March 9, 2005 and
February 3, 2006, are affected.
If you are an affected investor in Chicago Bridge & Iron
or Cooper Companies or any of the other cases listed below
under investigation, please do not hesitate to contact us at
info@securitiessleuth.com or 877.511.4717.
Cases Under Investigation
ProQuest Company (PQE) On February 9, 2006, the Company
announced that it had discovered material irregularities in
its accounting and would have to restate certain of its
previously issued financial statements. Its stock plummeted
on this news. Investors who purchased ProQuest between
January 9, 2003 and February 8, 2006 are affected.
Applica Inc. (APN) On April 20, 2005, the Company revealed
that its business was suffering and that it was marking
down inventory and experiencing increased warranty
expenses. Investors who purchased Applica between
November 4, 2004 and April 28, 2005 are affected.
Amkor (AMKR) The Company’s stock plunged 25% after
its was disclosed that its gross margins had declined
materially and that its “product mix” had turned unfavorable.
Investors who purchased Amkor between October 27, 2003
and July 1, 2004, are affected.
Take Two Interactive Software (TTWO) Since
January 18, 2006, Take Two investors have been stung by
a series of negative announcements. On January 25, 2006,
the Company’s audit committee chairwoman resigned and
stated that management failed to keep the board informed
of key issues. Among other things, the Company is currently
being investigated by the FTC for possibly engaging in unfair
or deceptive practice in the sale of its Grand Theft Auto
video game. Investors who purchased between
October 25, 2004 and January 27, 2006 are affected.
Dot Hill Systems Corp. (HILL) On February 3, 2005, the
Company announced its preliminary Fourth Quarter financial
results and that it would be restating its 2004 unaudited
financial results due to a data entry error that the Company
attributed to “the material weaknesses in its internal control
over its financial closing process.” Investors who purchased
HILL between April 23, 2003 and February 3, 2005
are affected.
Now with respect to settled cases. If you are an affected
investor – you purchased any of these stocks during the
relevant class period, you may wish to contact the claims
administrator to obtain additional information. Remember,
if you don’t submit your claim form, you won’t receive your
proportionate share of recovery.
Eagle Building Technologies (EGBT)
Class Period: November 21, 2000 to February 14, 2002
Claims Deadline: May 1, 2006
Claims Administrator: Berdon
eFunds Corporation (EFD)
Class Period: July 21, 20000 to October 24, 2002
Claims Deadline: May 5, 2006
Claims Administrator: Gilardi
Uniroyal Technology Corp.(UTCIQ)
Class Period: February 8, 2000 to May 13, 2002
Claims Deadline: June 28, 2006
Claims Administrator: Garden City
Solectron Corp. (SLR)
Class Period: June 18, 2001 to September 26, 2002
Claims Deadline: March 28, 2006
Claims Administrator: Garden City
NUI Corp. (NUI)
Class Period: November 8, 2001 to October 17, 2002
Claims Deadline: March 7, 2006
Claims Administrator: Garden City
Asia Pulp & Paper Company, Ltd. (APUUY)
Class Period: August 28, 1999 to April 4, 2001
Claims Deadline: March 6, 2006
Claims Administrator: Analytics
Cornell Companies, Inc. (CRN)
Class Period: March 6, 2001 to March 5, 2002
Claims Deadline: March 3, 2006
Claims Administrator: Gilardi
Again, if you are affected by a settled case, then you should
contact the claims administrator (rather than us). However,
if you are an affected investor in any of the companies under
investigation, you many wish to contact us so that you
can consider your options.
Likewise, if you happen to be aware of corporate restatements
or other financial fraud -- especially if you're a victim --
you're encouraged to contribute to the Sleuth by giving your
own tip-offs at www.securitiessleuth.com or by e-mailing
info@securitiessleuth.com. You can also call Mark McNair
at 877-511-4717. If you have a friend or colleague you
think would benefit from The Sleuth, please pass along
this issue and ask them to sign up at
www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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