|
Another week, another corporate restatement.
San Diego-based InfoSonics Corporation (AMEX: IFO)
distributes wireless handsets and accessories in the United
States and Latin America. On June 12, 2006, before the
opening of trading, InfoSonics disclosed it would restate is
financial results for the quarter ended March 31, 2006. The
restatement will reduce first-quarter net income by about
33%. The Company will restate because it improperly
classified warrants issued in January (in connection with
a private placement) as derivative liability when they
should have been booked as equity.
The market reaction to the announcement was severe.
IFO stock plummeted from $24.22 to $17.38 per share.
Investors who purchased IFO between May 8, 2006 and
June 9, 2006, are affected.
Herley Indicted
It’s troubling when a company has to disclose that, in
addition to a senior corporate official, the company itself
has been indicted. Unfortunately for its investors, Herley
Industries (NASDAQ: HRLY), a Pennsylvania-based maker
of military radar equipment, is in such a position.
Specifically, on June 6, 2006, Herley disclosed that the
U.S. Attorney’s office in the Eastern District of Pennsylvania
indicted the Company and its chairman on charges of fraud.
The indictment details the Company’s over-charging the
government in connection with several contracts. The CEO
is alleged to have personally directed the creation of false
documents and directed employees to mislead government
auditors. The Company and CEO were charged with,
among other crimes, wire fraud, “major fraud against the
United States,” and obstruction of a federal audit.
Guidance Problems at Matria Healthcare
Accurate guidance is critical to our markets. Marietta,
Georgia-based Matria Healthcare, Inc. (NASDAQ: MATR)
provides integrated programs and services focused on
wellness, disease and condition management, and informatics.
On June 7, 2006, after the close of trading, the Company
disclosed that it was revising its expected full-year 2006
revenue guidance to range between $337 to $341 million,
down from prior guidance of $370 to $380 and its earnings
per diluted share to a range between $1.10 to $1.17, down
from prior guidance of $1.35 per share to $1.56 per share.
It appears that the Company based its guidance, in part, on
growth the Company expected to report from the acquisition
of a competitor. The expected benefits from the acquisition
do not appear to have occurred.
Following this announcement, on June 8, 2006, share of Matria
declined $5.24 per share, from $27.36 per share to close at
$22.12 per share, a decline of approximately 20% on heavier
than usual volume. On June 9, 2006, shares declined an
additional $1.46 per share or approximately 7%. Investors
who purchased MATR between December 15, 2005 and
June 7, 2006, are affected.
Xerium Technologies and Its IPO Disclosure
Xerium Technologies, Inc. (NYSE: XRM) engages in the
manufacture and supply of consumable products used in
the production of paper—clothing and roll covers. It has been
alleged that the Prospectus and Registration Statement
issued in connection with the Company's Initial Public Offering,
on or about May 16, 2005, contained untrue statements of
material facts and omitted to state other facts necessary to
make the statements made not misleading. Specifically,
among other things, the Prospectus purported to warn about
the potential negative impact of its “Cost Reduction Programs,”
but failed to disclose that the Company's business was then
being negatively impacted by the Cost Reduction Programs
and the loss of business associated therewith.
On November 14, 2005, the Company reported that its cost
reduction programs had severely impacted its results, causing
the Company to experience declining net income. In
response to this announcement, the price of Xerium common
stock dropped from $9.51 per share to $6.85 per share on
extremely heavy trading volume. Investors who purchased
Xerium pursuant and/or traceable to the Company's IPO on
or about May 16, 2005 through November 15, 2005, are affected.
If you are an affected investor in any of these companies or
the other companies listed below, you may wish to contact us
at info@securitiessleuth.com or 877.511.4717 to discuss your
options.
Backdated Options and Recap of Other Matters
The backdated options scandal continues to grow. In certain
cases, this disclosure was very damaging to shareholders.
Such companies include, Affiliated Computer Services Inc.
(NYSE: ACS), Power Integrations Inc. (NASDAQ: POWI)
and American Tower Corp. (NYSE: AMT)
Two other cases of particular interest:
CSK Auto Corporation (NYSE: CAO) On March 26, 2006, the
Company indicated that it needed to conduct a thorough
review of certain accounting errors and irregularities discovered
in the course of its ongoing assessment of internal control
over financial reporting and an internal audit. Investors
who purchased CAO between September 2, 2004 and
March 24, 2006, are affected.
Vonage Holdings Corp. (NYSE: VG)
Allegedly, the Company violated securities laws in connection
with its IPO. Among other things, it appears that the Company
may have violated securities laws by failing to include a
prospectus with an offer to sell. On May 24, 2006, the Company
offered 31,250,000 shares at $17 per share. The stock closed
at $11.98 on June 2, 2006.
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 share of any settlement.
Carreker Corp. (CANI)
Class Period: July 30, 1999 to December 10, 2002
Claims Deadline: October 2, 2006
Claims Administrator: Heffler Radetich
Interpool Inc. (IPX)
Class Period: March 31, 1999 to December 26, 2003
Claims Deadline: August 24, 2006
Claims Administrator: Gilardi
Information regarding other recent settled cases, including the
cases listed below can be found at www.securitiessleuth.com.
Safety-Kleen Corp. (SK) (bonds)
Whitehall Jewellers (JWL)
ARM Financial Group, Inc. (ARMGQ)
Network Engines, Inc. (NENG)
Boston Chicken, Inc. (BOST)
Surebeam Corp. (SURE)
Salton, Inc. (SFP)
Again 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
|
