The original complaint charges defendants Remec, Inc., and certain of its officers with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that during the Class Period, defendants issued quarter after quarter of improving financial results, including increasing profitability in the Company's wireless division. Defendants also filed regular reports with the SEC, certifying that Remec's financial reporting was accurate and that the Company's internal controls were adequate. As a result of these statements, Remec stock traded nearly $12 per share during 2003. On September 8, 2004, after the market closed, defendants shocked the market by announcing that Remec would have to take an enormous goodwill impairment charge of $62.4 million for its wireless division - the same division that defendants assured investors was on a path to profitability. The next day, contrary to their repeated assurances regarding the integrity of Remec's financial controls, defendants revealed that the Company had identified 'potential control deficiencies' and that certain tax authorities were reviewing the Company's tax filings. As a result of these announcements, Remec stocked plunged to only $4.21 per share, and has lost more than 50% of its value.
According to the Company’s Form 10-K for the fiscal year ended January 31, 2009, on September 29, 2004, three class action lawsuits were filed against the Company and certain former officers (the “Defendants”) in the United States District Court for the Southern District of California alleging that between September 8, 2003 and September 8, 2004 (the “Class Period”) the Defendants made false and misleading statements and failed to disclose material information regarding the Company’s financial condition, operations and future business prospects in violation of federal securities laws. On January 18, 2005, the law firm of Milberg Weiss Bershad & Schulman LLP (“Milberg Weiss”) was appointed Lead Counsel and its client was appointed Lead Plaintiff. After several consolidated and amended complaints were filed, challenged by the Defendants and dismissed by the Court with leave to amend, the Court denied the Company’s Motion to Dismiss the Fourth Amended Complaint on September 26, 2006. REMEC filed its Answer to the Fourth Amended Complaint on November 6, 2006, denying all liability and asserting certain affirmative defenses. On November 21, 2007 the Court granted Plaintiff’s motion for class certification.
The parties engaged in discovery, including production of documents, between May 2007 and March 2009. All discovery, including expert discovery, is now closed. There are currently four motions seeking summary judgment or partial summary judgment pending before the Court, three made by the Defendants and one made by the Plaintiffs. The time period for filing dispositive motions has closed. A Pretrial Conference has been scheduled by the Court for June 26, 2009, at which time a trial date will be set.
On June 3, 2009, Judge Michael M. Anello granted the motion to dismiss one of the lead plaintiffs. On April 21, 2010, Judge Michael M. Anello granted in part and denied in part the defendants’ motions for summary judgment and dismissed the civil action with prejudice. Judgment was entered in favor of the defendants, and the case is now closed. On May 19, 2010, the lead plaintiffs filed a Notice of Appeal in the Ninth Circuit Court of Appeals, appealing the Judgment. On September 1, 2010, the Court entered the Order from the U.S. Court of Appeals. Pursuant to the stipulation of the parties, the appeals were voluntarily dismissed.