ABS Industries, Inc. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

ABS Industries, Inc. Conclusion: According to the complaint, the case involves a classic cooked book scheme in which Defendants, among other wrongful acts, knowingly disseminated materially false financial statements reporting "record" and accelerating sales and earnings per share.

Specifically, the complaint alleges that the financial and other misrepresentations disseminated by Defendants during the Class Period created the illusion that ABSI was enjoying unrestrained growth in sales and earnings when, in reality, the growth was attributable in material part to sales improperly recorded as recording revenue, contrary to the Company's own criteria for recording revenue only when goods have been shipped and title passed to the buyer. As a result, Plaintiff and other unsuspecting members of the investing public paid inflated prices as high as $13.00 per share for ABSI shares during the Class Period. Beginning on January 10, 1996, ABSI began to reveal the Company's true financial condition and prospects, and the other adverse information described herein, disclosed that it will restate its financial results for the past three years and that its operating cash flow is not sufficient to support its current obligations. In response, the trading price of ABSI shares plunged from a price of $6.75 per share on January 10, 1996 to a closing price of $3.00 per share on January 13, 1996, a 55% decline, resulting in damages to the Class well in excess of ten million dollars.

According to the docket, on October 19, 1998, a Stipulation and Settlement Agreement was filed and on January 29, 1999, the Court entered the Final Judgment and Order certifying the class and approving the settlement. The plantiffs’ counsel was awarded attorneys’ fees in the amount of $205,961.93 and reimbursement of expenses of $6,562.64, paid from the settlement fund. Each named plaintiff in this case and the North Carolina case received $5500.00. The case was dismissed.

INDUSTRY CLASSIFICATION:
SIC Code: 3460
Sector: Basic Materials
Industry: Metal Mining

COMPANY/ISSUER NAME:	ABS Industries, Inc.
COMPANY/ISSUER TICKER:	ABSI
COMPANY WEBSITE:

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Leo Hawk, et al. v. ABS Industries, Inc., et al.

COURT: N.D. Ohio	DOCKET NUMBER: 96-CV-109
JUDGE NAME: Hon. Solomon Oliver, Jr.
DATE FILED: 01/19/1996	SOURCE: Complaint
CLASS PERIOD START: 03/17/1993	CLASS PERIOD END: 01/10/1996
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Strauss & Troy The Federal Reserve Building, 150 East Fourth Street, Cincinnati, OH, 45202-4018 (voice) 513.621.2120, (fax) 513.241.8250, wlwoods@strauss-troy.com Weisman, Goldberg & Weisman Co., L.P. 101 Prospect Ave, West; 1600 Midland Building, Cleveland, OH, 44115 (voice) 216.781.1111, (fax) 216.781.6747, White, Getgey & Meyer 1700 Central Trust Tower One, West Fourth Street , Cincinnati, OH, 45202 (voice) 513.241.3685., (fax) , _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 01/18/1996
Docket
Type: Docket		Date on the document: 01/19/1996
U.S. District Court Civil Docket
Type: Docket		Date on the document: 07/03/2000

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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