The original suit alleges that defendants, the Company and certain of its officers and directors, violated Section 10(b) of the Securities Exchange Act of 1934 by issuing false and misleading statements regarding its financial performance, and failing to issue timely reports concerning adverse developments in certain material litigation. Adverse news regarding Nam Tai was released by the Company after the close of trading on February 14, 2003. In reaction to this unexpected bad news, Nam Tai shares fell significantly, closing at $27.65 per share on February 18, 2003, down $5.76, a decline of more than 15%.
As summarized by the Company’s Form 20-F For the Fiscal Year Ended December 31, 2008, we and certain of our directors were defendants in consolidated class actions entitled Rocco vs. Nam Tai Electronics et al., Lead Case No. 03-cv-01148-JES, originally commenced on February 20, 2003 and pending in the United States District Court in the Southern District of New York. The named plaintiffs purported to represent a putative class of persons who purchased our common shares from July 29, 2002 through February 18, 2003. The plaintiffs asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and allege that misrepresentations and/or omissions were made during the alleged class period concerning the partial reversal of an inventory provision and a charge to goodwill related to our LCDP segment. We have filed an answer to the amended and consolidated complaint and oral argument on the plaintiffs’ most recent motion for class certification was held on February 1, 2007. Following that hearing, on August 21, 2007, the court denied the plaintiffs’ motion for class certification. A conference with the court was held on January 17, 2008 wherein the plaintiff indicated that he wished to proceed with his case as an individual, notwithstanding the denial of class certification. On March 17, 2008, the Company settled this remaining individual claims of the plaintiff. In the settlement, Nam Tai denied any wrongdoing or liability and paid no penalty or material amount to dispose of the litigation, which has been dismissed by the court with prejudice.