According to the docket, on October 31, the Court entered the Order and Final Judgment signed by U.S. District Judge Daniel T.K. Hurley. The case is closed.
By the Notice of Pendency of Class Action, a Settlement Fund consisting of $4.95 million in cash, plus interest, has been established. Notice is hereby given, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of Florida, West Palm Beach Division (the "Court") dated July 9, 2003, that a hearing will be held before the Honorable Daniel Hurley in the United States Courthouse, 701 Clematis Street, West Palm Beach, Florida, 33401, at 4:30 p.m., on October 20, 2003 (the "Settlement Fairness Hearing") to determine whether a proposed settlement (the "Settlement") of the above-captioned action (the "Action") as set forth in the Stipulation and Agreement of Settlement dated July 1, 2003 (the "Stipulation"), is fair, reasonable and adequate and to consider the proposed Plan of Allocation for the Settlement proceeds and the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses.
As reported by the Company’s FORM 10-K for the fiscal year ended June 30, 2001, on June 4, 2001, Bruce and Verva Enoch, purporting to act on behalf of a class
consisting of all purchasers of the Company's common stock from January 12,
2001, through April 9, 2001, commenced an essentially identical lawsuit against
the same defendants as were sued in the Markowitz litigation. By Order dated July 26, 2001, the Markowitz and Enoch actions were consolidated into a single action, In re Sensormatic Electronics Corp. Securities Litigation, Case No. 01-8346-CIV-RYSKAMP. The following plaintiffs and class members were appointed lead plaintiffs: Leo Bugg, Jr., Frank A. Follmer and Karl Rugart.
The original class action charges Sensormatic and certain officers and directors with violating the federal securities laws by issuing a series of materially false and misleading statements to the market between January 12, 2001 and April 9, 2001 concerning its supposedly strong and growing sales and lucrative new contracts with massive clients. These statements, as alleged in the complaint, were materially false and misleading because they failed to disclOse that demand for Sensormatic's products was sluggish throughout the Class Period, and the Company was deeply discounting its products to inflate sales. On April 10, 2001, Sensormatic issued a press release announcing that its third quarter of 2001 revenue had declined from the third quarter of 1999, and that it would miss securities analysts' earnings estimates by 66%. In response to this announcement, Sensormatic's stock price dropped by 31% in one day to $13 per share on heavy trading volume. Prior to the disclosure of the true facts about Sensormatic's business, certain Sensormatic insiders sold a total of over $5.5 million of their personally held Sensormatic stock.