According to a press release dated March 29, 2005, on March 18, the Honorable Katharine S. Hayden, U.S. District Judge, District of New Jersey, entered an order approving the Commission's plan to distribute disgorgement, prejudgment interest, and civil penalties paid by defendants Measurement Specialties, Inc. (MSI) and its former chief financial officer in connection with the defendants' settlement of the Commission's civil enforcement action against them. The distribution plan provides for the establishment of a distribution fund in the amount of $1,453,401 plus accrued interest, and the appointment of Berdon Claims Administration LLC, the claims administrator of the settlement distribution fund in In re Measurement Specialties, Inc. Securities Litigation, as the Commission's special agent to administer the distribution fund.
On July 21, 2004, the court approved its settlements of both the shareholder class action, In re Measurement Specialties, Inc. Securities Litigation, Civ. Action No. 02-CV-1071 (D.N.J.), and the Securities and Exchange Commission's civil action, SEC v. Measurement Specialties, Inc. and Kirk Dischino, Civ. Action No. 04-CV-3000 (D.N.J.). The final judgments were consistent with previously disclosed settlement terms.
On March 31, 2003, the Court denied all of the Plaintiffs' motions to certify the case as a class action. Plaintiffs have not filed an interlocutory appeal
of the Court's decision denying class certification to the Fifth Circuit Court
of Appeals. On June 2, 2003, the Plaintiff's submitted a proposed Trial and
Case Management Plan, suggesting that the Plan would cure the defects in the
Plaintiff's motions to certify the class. The Court has taken no action with
respect to the proposed Trial and Case Management Plan. The Plaintiffs' case
against the Defendants may now proceed in due course, but not on behalf of a
class of Plaintiffs but only with respect to the specific claims of the
Plaintiffs named in the lawsuit.
The original complaint charges Measurement Specialties and certain of its officers and directors with violations of the federal securities laws. The complaint alleges, among other things, that during the Class Period defendants issued a series of false and misleading statements regarding the Company's financial condition. In addition, the Registration Statement and Prospectus issued in connection with the offering misrepresented and omitted material facts concerning the Company's financial results. Furthermore, during the Class Period, and in violation of Generally Accepted Accounting Principles, defendants caused Measurement Specialties to falsely report favorable financial results by, among other things, improperly recognizing revenues and improperly overstating inventories. As a result, Measurement Specialties' stock traded at artificially inflated levels during the Class Period.