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It has been stifling hot the past few weeks, but maybe the weather will start to cool down. Before you take your final summer vacation, though, you might want to check your portfolio. Or, if you are at the beach now, I am jealous because I am stuck in hot and sticky Washington, DC, spending a chunk of my summer investigating corporate irregularities.
Reading corporate financials isn’t exactly a beach read, however some of the disclosures… or lack of disclosure… can be fascinating. At least to some of us, anyway. Even if they’re not page turners, some of these disclosures could have had a devastating impact on the way some of your stocks have performed… and not in a good way.
So, this week, I am just going to give you a short summary of some of the cases I am investigating. I may give you details about some of these cases in future weeks, but these are instances were I believe that affected shareholders may wish to take action against the companies and some of their executives. You can always reach me at 646 752 9861 or info@securitiessleuth.com.
Motorola, Inc. (NYSE: MOR)
Investors who purchased Motorola between July 19, 2006 and January 4, 2007 may be affected.
It is alleged that in order to artificially inflate the price of Motorola stock, in the summer of 2006, the Company began a series of false and misleading statements regarding its business and prospects. Specifically, investors were told to expect strong growth in sales and revenues. But in announcements the Company made in October 2006 and January 2007, it was clear the Company would not make these expectations, and Motorola stock tumbled when its true condition was disclosed.
Luminent Mortgage Capital, Inc. (NYSE: LUM)
Investors who purchased between October 10, 2006 and August 6, 2007 may be affected.
On August 6, 2007 the Company issued a press release announcing that the secondary market for mortgage loans and mortgage-backed securities had “seized-up” and that, as a result, the Company was experiencing a significant increase in margin calls on its highest quality assets. As a result, the Company’s stock experienced a one-day decline of 75%.
Heelys, Inc. (NASDAQ: HLYS)
Investors who purchased Heeleys’ stock since its December 8, 2006, IPO through August 7, 2007, may be affected.
On August 7, 2007, Heelys reported its third quarter and full-year forecasts would be below analyst projections. On August 8, 2007, Heelys shares declines approximately 48% to close at $11.42 per share.
GPC Biotech AG (NASDAQ: GPCB)
Investors who purchased GPC between December 5, 2005 and July 24, 2007 may be affected.
On July 24, 2007, the FDA announced that its oncology panel had unanimously recommended against the approval of Satraplatin. The Committee said the FDA had no prior experience with that type of endpoint, an issue which was “clearly communicated” to GPC Biotech while the drug was in development. As a result, GPC stock fell approximately 35% on July 25, 2007.
Pall Corporation (NYSE: PLL)
Investors who purchased Pall securities within the past 5 years may be affected.
On July 19, 2007 the Company disclosed that a board committee began an inquiry into a possible material understatement of US income tax payments. On August 2, 2007, the Company disclosed that its annual and quarterly financial statements for the fiscal years 1999 through 2006 and the first three quarters of 2007 should no longer be relied upon and may need to be restated.
CV Technologies (Toronto Exchange – CVQ.TO)
Investors who purchased CVT between December 11, 2006 and March 23, 2007 may be affected.
On April 11, 2007, CVT announced that the Company decided that its consolidated financial statements for the year ended September 30, 2006, as well as its interim consolidated financial statements for the first quarter of fiscal 2007 warranted restatement due to a revenue deferral issue in the US market.
RTI International Metals (NYSE: RTI)
On July 25, 2007, before the opening of trading, the Company disclosed that US Customs and Border Protection was investigating claims filed by the Company to obtain reimbursement of duty paid by the Company on certain imports.
We are investigating both of these companies and affected investors may wish to contact us at info@securitiessleuth.com or 646 752 9861 to discuss 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 http://securitiessleuth.typepad.com or by e-mailing info@securitiessleuth.com.
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
http://www.cartville.com/app/join.asp?MerchantID=47994.
Warmest regards,
Mark McNair
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