OmniVision Technologies, Inc. Conclusion: According to an article dated December 7, 2007, a judge finalized a $13.75 million class action settlement Thursday in a lawsuit that alleged OmniVision Technologies Inc. misled investors about the financial state of the company. Judge Samuel Conti of the U.S. District Court for the Northern District of California finalized the agreement, which calls for the money to be placed in a settlement fund. The plaintiffs' counsel, Milberg Weiss LLP and Girard Gibbs LLP, will receive 28% of the fund or about $3.8 million and about $560,489 in fees.
In a press release dated June 22, 2007, pursuant to an Order of the United States District Court for the Northern District of California, in In re OmniVision Technologies, Inc., Master File No.: C-04-2297 SC that a hearing will be held on September 7, 2007, at 10:00 a.m., before the Honorable Samuel Conti at the United States Courthouse, 450 Golden Gate Avenue, San Francisco, California, for the purpose of determining (1) whether the proposed settlement of the claims in the action for the sum of $13,750,000 in cash should be approved by the Court as fair, reasonable and adequate; (2) whether, thereafter, this Litigation should be dismissed with prejudice as set forth in the Stipulation of Settlement; (3) whether the Plan of Allocation is fair, reasonable and adequate and therefore should be approved; and (4) whether the application of Lead Counsel for the payment of attorneys' fees and reimbursement of expenses incurred in connection with this Litigation should be approved.
On May 14, 2007, a Stipulation of Settlement was filed. Defendants have agreed to a settlement amount of $13,750,000.
On November 22, 2006, a Notice of Settlement in Principle was filed.
As summarized by a law firm’s web site, on July 22, 2004, on June 16, 2006 deadlines were set with discovery to be completed by January 19, 2007 and a tentative jury trial scheduled for March 19, 2007. On July 26, 2006 Plaintiffs filed a Motion for Class Certification with a hearing on the matter set for October 13, 2006.
Previously, Judge Samuel Conti issued an Order consolidating all related cases into one class action lawsuit entitled In re OmniVision Technologies, Inc., C-04-2297 SC. On August 9, 2004, competing motions for the appointment of Lead Plaintiff and Lead Counsel were filed with the Court. On September 24, 2004 Judge Conti issued an Order appointing Lead Plaintiffs and Lead Counsel. On November 23, 2004 Lead Plaintiffs filed their Consolidated Complaint. On January 7, 2005 Defendants filed their Motion to Dismiss this complaint and Lead Plaintiffs filed their opposition to Defendants’ motion on February 22, 2005. On April 20, 2005, Judge Samuel Conti issued an Order vacating Defendants’ motion and granting Lead Plaintiffs leave to amend their complaint by May 20, 2005. On May 20, 2005, Lead Plaintiffs filed their Second Consolidated Amended Complaint (the “2nd Amended Complaint”). Defendants filed their Motion to Dismiss the 2nd Amended Complaint on June 3, 2005, which Lead Plaintiffs opposed on June 17, 2005. On June 24, 2005, Defendants filed their Reply Brief in further support of their motion. On July 29, 2005, Judge Samuel Conti issued an Order denying Defendants’ Motion to Dismiss in its entirety. On September 7, 2005, Defendants filed their Answer to the 2nd Amended Complaint.
The original complaint charges OmniVision and certain of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that defendants, during the Class Period, issued a series of material misrepresentations to the market concerning the Company's financial condition thereby artificially inflating the price of OmniVision's common stock. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the Company knew or recklessly disregarded the fact that the Company was losing customers to larger rivals such as Micron Technologies, Inc., Texas Instruments Inc., and National Semiconductor Corporation; (2) that the Company knew or recklessly disregarded that its surging growth was hitting a plateau, due to the decline in the customer base; (3) that the defendants, in order to mask the decline in growth, manipulated the Company's financial results through improper revenue recognition, which was in violation of Generally Accepted Accounting Principles; and (4) that as a result, the Company's financial results were materially inflated and inaccurate at all relevant times.
The complaint further alleges that on or around June 9, 2004, OmniVision announced, before the market opened, that it had rescheduled the release of its fiscal 2004 fourth-quarter and year-end results to June 23, 2004, after the close of the market, from the previously announced date of June 9, 2004. Additionally, OmniVision announced that it was considering the restatement of financial results for certain quarters of fiscal 2004 and, possibly, fiscal 2003. News of this shocked the market. Shares of OmniVision fell $7.84 per share or 30.78 percent on June 9, 2004, to close at $17.63 per share, on unusually high volume.
SIC Code: 3674
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