The Law Firm of Goldman Scarlato & Karon, P.C. Announces Class Action Lawsuit Against PEMSTAR, Inc.
June 17 2005 - 12:04PM
Business Wire
Goldman Scarlato & Karon, P.C., a law firm with offices in
Pennsylvania and Ohio, announces that a lawsuit has been filed in
the United States District Court for the District of Minnesota, on
behalf of persons who purchased or otherwise acquired publicly
traded securities of PEMSTAR, Inc. ("PEMSTAR" or the "Company")
(NASDAQ:PMTR) between January 29, 2003 and January 24, 2005,
inclusive, (the "Class Period"). The lawsuit was filed against
PEMSTAR, Allen Berning, Roy Bauer and Gregory Lea ("Defendants").
If you are a member of this class and wish to view a copy of a
complaint and join this class action, please e-mail us at
penny@gsk-law.com and request a copy of the complaint and a
plaintiff certification. If you are a member of the Class, you may
move the Court no later than August 15, 2005 to serve as a lead
plaintiff for the Class. Any member of the purported class may move
the Court to serve as lead plaintiff through counsel of their
choice, or may choose to do nothing and remain an absent class
member. However, if you choose to remain an absent class member,
unless and until a class is certified, you are not represented by
counsel. The complaint alleges that Defendants violated Sections
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder. Specifically, the complaint alleges
that Defendants issued a series of false and misleading financial
statements to the investing public regarding the Company's
financial position. More specifically, the complaint alleges that
during the Class Period, PEMSTAR was suffering from liquidity
constraints that prohibited it from achieving gross margin
expansion, a prerequisite to generating accounting profits. In
addition, the Company failed to disclose that it needed to attain
approximately a 9% gross margin in order to reach profitability, a
level which would be unattainable in a reasonable period of time.
Additionally, the complaint alleges Defendants misrepresented the
Company's financial condition through the understatement of the
Company's liabilities associated with its Mexican facilities and
overstating its accounts receivables that were in fact impaired. On
January 24, 2005, PEMSTAR issued a press release announcing that it
was revising its outlook for the third quarter of fiscal 2005 and
that the Company had implemented a cost-reduction initiative. In
addition, it announced that it was restating its financial results
for the fiscal year ended March 31, 2004 due to accounting issues
at it Mexican facility. Shares reacted negatively to the news,
falling to a level roughly 70% below the Company's Class Period
high. If you bought PEMSTAR securities between January 29, 2003 and
January 24, 2005, inclusive, and would like to obtain information
about the lawsuit, then you are invited to call (888) 753-2796 to
speak with an advisor.
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