FARO Technologies, Inc. - Securities Class Action

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FARO Technologies, Inc. Summary: A press release dated on July 14, 2008 stated that FARO Technologies, Inc. has settled for $6,875,000 due to its securities fraud class action lawsuit filed in the U.S. District Court for the Middle District Court of Florida. A hearing will be held before the Honorable Judge Anne C. Conway, of United States District Court for the Middle District of Florida, at 9:00 a.m., on October 3, 2008, to determine whether the proposed settlement and the Plan of Allocation of settlement proceeds should be approved as fair, reasonable, and adequate, to consider the application of plaintiffs' counsel for attorneys' fees and reimbursement of expenses, and to consider the application for reimbursement of expenses of the lead plaintiff

According to a press release dated February 26, 2008, FARO Technologies, Inc., the world market leader in portable computer-aided measurement arms and laser tracker sales, announced that it has entered into a Memorandum of Understanding to settle the consolidated class action securities fraud lawsuit pending against FARO and certain of its current and former officers and directors in the United States District Court for the Middle District of Florida (the "Securities Litigation"). Pursuant to the Memorandum of Understanding, which is subject to certain conditions, the issuer of the Company's directors and officers insurance policy will pay $6.875 million into a settlement fund that will be distributed to members of a class of all persons who purchased the Company's common stock from April 15, 2004 through March 15, 2006 and to the lead plaintiff's counsel and also will be used to pay various costs. The Memorandum of Understanding provides that the parties to the Securities Litigation will file with the court a Stipulation and Agreement of Settlement seeking the court's preliminary and final approval of the terms of the proposed settlement. If the Court approves the settlement, a judgment will be entered dismissing the Securities Litigation, with prejudice, as against each defendant.

On September 18, 2007, the Court issued the Order adopting the August 7, 2007 Report and Recommendation. According to the Order, the FARO Defendants’ Motion to Dismiss the Consolidated Second Amended Class Action Complaint, filed on May 11, 2007, is denied. Defendant Grant Thornton LLP’s Motion to Dismiss Consolidated Second Amended Class Action Complaint With Prejudice, filed on May 11, 2007, is granted.

In a press release dated August 8, 2007, FARO Technologies, Inc. (NASDAQ:FARO), the world market leader in portable computer-aided measurement arms and laser tracker sales, announced that a U.S. Magistrate judge for the Middle District of Florida issued a Report and Recommendation to the U.S. District Court for the Middle District of Florida to enter an order denying FARO's and certain FARO officer's Motion to Dismiss the second amended consolidated securities class action complaint filed against FARO and certain FARO officers. The U.S. District Court has not yet ruled on the Report and Recommendation or the Motion to Dismiss.

On February 22, 2007, the plaintiff filed a Consolidated Second Amended Class Action Complaint. The defendants responded by filing motions to dismiss the Consolidated Second Amended Class Action Complaint.

In a press release dated February 8, 2007, FARO Technologies, Inc., the world market leader in portable computer-aided measurement arms and laser tracker sales, announced that the U.S. District Court for the Middle District of Florida has dismissed a class - action securities fraud complaint filed against the Company, with leave to file an amended complaint. … On January 12, 2007, an U.S. magistrate judge issued a Report and Recommendation that the Complaint be dismissed, as against all defendants, with leave to re-plead. As to FARO and the individual defendants, the Report and Recommendation primarily was based on the magistrate judge's findings that the Complaint failed to adequately allege: (i) scienter (i.e., intentionally fraudulent or severely reckless conduct) with respect to certain claims; and (ii) that certain supposed misrepresentations or omissions actually caused economic loss. On February 3, 2007, the Court adopted the Report and Recommendation, and set a February 22, 2007 deadline for the plaintiff to file a Second Amended Complaint to attempt to state claims "in a fashion sufficient to establish each claim".

According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2006, om December 6, 2005, the first of four essentially identical class action securities fraud lawsuits were filed against the Company and certain officers of the Company. On April 19, 2006, the four lawsuits were consolidated, and Kornitzer Capital Management, Inc. was appointed as the lead plaintiff. On May 16, 2006, Kornitzer filed its Consolidated Amended Class Action Complaint against the Company and the individual defendants. The amended complaint also names Grant Thornton LLP, the Company’s independent registered public accounting firm, as an additional defendant. The Company filed a Motion to Dismiss the amended complaint on July 31, 2006. On August 30, 2006, Kornitzer filed its memorandum in opposition to the Company’s Motion to Dismiss. On September 15, 2006, the parties’ counsel presented oral argument on the Motion to Dismiss to the court. The court has not ruled on the Motion to Dismiss.

The original Complaint alleges defendants violated federal securities laws by issuing a series of materially false statements. Specifically, FARO repeatedly issued false and misleading quarterly and annualized financial guidance throughout the Class Period knowing of the deficient and defective state of one or more of its controls and systems, with an adverse impact on its inventory accounting, order fulfillment and financial statements. It is further alleged that even though defendants quietly placed a resource management system into operation, defendants continued to conceal their deficient and defective controls and practices, causing the newly implemented system to supply false and erroneous information to the Company's departments and functions, with a continued direct, adverse impact on order fulfillment and corporate earnings.

The complaint further alleges that on or around November 3, 2005, FARO announced its third quarter of 2005 financial results. The results revealed that FARO had incurred a pre-tax $1.6 million adjustment cost for inventory costing and consumption variances related to the implementation of a new enterprise resource planning ("ERP") system and that FARO had not met growth targets. On this news, the price of FARO stock plummeted $5.88, from its closing price of $22.38 on November 3, 2005, to finally close on November 7, 2005, at $16.50, for a two-day loss of 26.38%.

FARO engages in the design, development, marketing, and support of portable, software-driven, 3D measurement systems for a range of manufacturing and industrial applications.

INDUSTRY CLASSIFICATION:
SIC Code: 3829
Sector: Technology
Industry: Scientific & Technical Instr.

COMPANY/ISSUER NAME:	FARO Technologies, Inc.
COMPANY/ISSUER TICKER:	FARO
COMPANY WEBSITE:	http://www.faro.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Diane Goldberger, et al. v. FARO Technologies, Inc., et al.

COURT: M.D. Florida	DOCKET NUMBER: 05-CV-01810
JUDGE NAME: Hon. Anne C. Conway
DATE FILED: 12/06/2005	SOURCE: Notice of Filing
CLASS PERIOD START: 05/06/2004	CLASS PERIOD END: 11/03/2005
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC) 1100 New York Avenue, N.W., Suite 500, West Tower, Washington, DC, 20005 (voice) 202.408.4600, (fax) 202.408.4699, lawinfo@cmht.com Federman & Sherwood (Oklahoma City) 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Glancy Binkow & Goldberg LLP (Los Angeles) 1801 Ave. of the Stars, Suite 311, Los Angeles, CA, 90067 (voice) (310) 201-915, (fax) (310) 201-916, info@glancylaw.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Milberg Weiss Bershad & Schulman LLP (Boca Raton) 5355 Town Center Road, Suite 900, Boca Raton, FL, 33486 (voice) 561.361.5000, (fax) 561.367.8400, Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Scott & Scott LLC (Connecticut) P.O. Box 192, 108 Norwich Avenue, Colchester, CT, 06415 (voice) 860.537.5537, (fax) 860.537.4432, scottlaw@scott-scott.com Wechsler Harwood, LLP. 488 Madison Avenue 8th Floor, New York, NY, 10022 (voice) 212.935.7400, (fax) 212.753.3630, info@whesq.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 9

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 12/06/2005

REFERENCE COMPLAINT

In Re: FARO Technologies, Inc. Securities Litigation

COURT: M.D. Florida	DOCKET NUMBER: 05-CV-01810
JUDGE NAME: Hon. Anne C. Conway
DATE FILED: 02/22/2007	SOURCE: Docket
CLASS PERIOD START: 04/15/2004	CLASS PERIOD END: 03/15/2006
TYPE OF COMPLAINT: Second Amended
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Shepherd, Finkelman, Miller & Shah, LLC 35 East State Street, Media, PA, 19063 (voice) 877.891.9880, (fax) , jshah@classactioncounsel.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 5/16/2006
Consolidated Second Amended Class Action Complaint
Type: Complaint		Date on the document: 02/22/2007
Order
Type: Order		Date on the document: 09/18/2007
Order Preliminarily Approving Settlement And Providing For Notice
Type: Order		Date on the document: 6/2/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 6/2/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 12/02/2008

OTHER DOCUMENTS
Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Sean Belfi, et al. v. FARO Technologies, Inc., et al.
Type: Complaint		Date on the document: 01/03/2006
Class Action Complaint
Case Name and/or Number: Anthony R. Johnson, et al. v. FARO Technologies, Inc., et al.
Type: Complaint		Date on the document: 01/12/2006

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