According to the docket, on November 2, 2000, a Stipulation and Agreement of Settlement was filed. On November 29, 2000, the Court entered the Order approving the certification of the class and approving the settlement of the action. That same day, the Court entered the Order and Final Judgment signed by U.S. District Judge Charles J. Siragusa.
As summarized by the Company’s FORM 10-K for the fiscal year ended: March 31, 2000, the Company and certain officers and directors have been named defendants in several class-action lawsuits alleging violations of federal securities laws relating to the Company's September 1997 public offering and certain of the Company's public filings in 1997 and early 1998. The underwriters of the public offering have also been named as defendants in three of these class actions. The actions allege that the Company, certain of its officers and directors and the underwriters made or are responsible for alleged misstatements and omissions in various press releases and public filings concerning the Company's business and financial condition. In March, 2000, the Company reached an agreement in principle to settle the consolidated shareholder class action suits. The settlement is subject to certain conditions, including court approval. The Company recorded a one-time charge of $1.4 million during the fourth quarter ending March 31, 2000, for settlement costs not covered by insurance.
The original Class action alleges securities fraud by Detection Systems Inc. (NMS:DETC) and four of its top officers. During the class period, the four individual defendants sold in the aggregate 220,000 shares of Detection Systems common stock, for proceeds of $4.4 million. Prior to these sales, the four individual defendants had not sold any Detection Systems stock for a period of at least five years, according to public records cited in the complaint. The Complaint alleges that defendants misled the public regarding alleged manufacturing and other efficiencies that supposedly were enabling the Company to improve significantly its profit margins. On Feb. 23, 1998, Detection Systems announced that it would restate its results for the quarter ending Sept. 30, 1997. The restatement would report income for the quarter that was less than one-half the amount originally reported.