Hanzman Criden & Love, P.A. Files Class Action Lawsuit against InfoSonics Corporation
28 Giugno 2006 - 9:26PM
Business Wire
Hanzman Criden & Love, P.A. has filed a class action complaint
against InfoSonics Corporation ("InfoSonics") (AMEX:IFO) in the
U.S. District Court for the Southern District of California on
behalf of investors who purchased the publicly traded securities of
InfoSonics during the period from May 9, 2006 through and including
June 9, 2006 (the "Class Period"). The complaint alleges that
InfoSonics and its top officers engaged in a scheme to defraud
InfoSonics investors in violation of the federal securities laws by
reporting false financial results on May 8, 2006 for its first
quarter ended March 31, 2006. Specifically, the Complaint alleges
that defendants knew, or with deliberate recklessness disregarded,
that the Company had improperly accounted for warrants issued in
connection with a January 2006 private placement which enabled it
to report net income of $1.738 million for that quarter. Before the
market opened on Monday, June 12, 2006, InfoSonics shocked the
market when it disclosed that it would need to restate its
previously reported net income for the first quarter down to $1.173
million, a decrease of 32.5%, due to the improper accounting
treatment of the warrants. InfoSonics stock immediately plunged
more than 28% that day on extraordinarily high volume. The
Complaint further alleges that, while in possession of material
nonpublic information concerning InfoSonics accounting for the
warrants, defendants sold massive amounts of their personal
holdings between May 11, 2006 and June 7, 2006 for proceeds
exceeding $3 million. Indeed, as the Company admitted in a Form 8-K
filed on June 12, 2006 with the SEC, InfoSonics had determined by
Monday, June 5, 2006 that it would need to restate its previously
reported financial results because it had improperly accounted for
the warrants. Nevertheless, its Chief Financial Officer and the
President of the Company's Latin American operations continued to
sell their personal InfoSonics stock even after that determination.
If you purchased InfoSonics publicly traded securities during the
Class Period (May 9, 2006 - June 9, 2006), you may, no later than
August 14, 2006, move to be appointed as a Lead Plaintiff. A Lead
Plaintiff is a representative party that acts on behalf of other
class members in directing the litigation. If you have sustained
losses on your purchases of InfoSonics publicly traded securities
during the Class Period, please contact Hanzman Criden & Love,
P.A. at (305) 357-9010 for a more thorough explanation of the Lead
Plaintiff selection process and the claims asserted against
InfoSonics. Hanzman Criden & Love, P.A. has offices in Miami,
Florida. The founding partners have over fifty years combined
experience representing plaintiffs in a wide variety of litigation
matters including securities, antitrust, commercial, and
consumer-fraud actions.
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