According to a press release dated July 14, 2003, Robotic Vision Systems, Inc. (RVSI) announced that the settlement terms of a class action lawsuit filed against the company in 2001 had been approved by the United States District Court, District of Massachusetts. The $5.5 million cost of the settlement will be borne by RVSI's insurance carrier.
By order of the Court dated August 21, 2001, all related cases were consolidated into one class action lawsuit. By the same Order, two Lead Plaintiffs were appointed to represent the class and two firms were appointed as Co-Lead Counsel to oversee the litigation. Lead Plaintiffs filed their Consolidated Amended Complaint on December 3, 2001, which Defendants moved to dismiss on February 1, 2002. Both parties briefed the issues and on July 11, 2002, a hearing on Defendants' Motion to Dismiss was held and the motion was taken under advisement.
The complaint alleges that defendants Robotic Vision and certain of its officers and directors violated the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, Robotic Vision reported materially false and misleading financial results for fiscal year 2000 in violation of Generally Accepted Accounting Principles. On May 15, 2001, before the market opened, Robotic Vision announced that it would be restating its financial results for the fiscal year ended September 30, 2000 and for the three month period ended December 31, 2000 to correct certain accounting errors involving the recognition of revenue at its Acuity CiMatrix division. As a result of defendants' alleged fraud, Robotic Vision's common stock traded at artificially inflated levels throughout the Class Period. In response to the shocking news that Robotic Vision's financial statements required restatement, the Company's stock price lost almost 15% of its value in one day.
On May 30, 2013, the Court preliminarily approved the proposed settlement.