According to a press release dated August 29, 2007, a hearing will be held on December 18, 2007 at 10:30 a.m. in Courtroom 2, United States Courthouse, 55 Pleasant Street, Concord, NH 03301-3941 to determine: (1) whether the Class should be certified pursuant to Rule 23 of the Federal Rules of Civil Procedure, consisting of all persons who purchased, otherwise acquired, or sold StockerYale common stock during the period from April 19, 2004 through and including May 24, 2005, … 2) whether the proposed settlement (the "Settlement") of the above-captioned action ("Action") for $3,400,000 in cash plus accrued interest (the "Settlement Fund") should be approved by the Court as fair, reasonable, and adequate; (3) whether the Plan of Allocation is fair, reasonable, and adequate and therefore should be approved; (4)whether the motion of Lead Plaintiffs' Counsel for an award of attorneys' fees and reimbursement of expenses should be approved; and (5) whether the Action should be dismissed with prejudice.
In a press release dated June 27, 2007, on June 26, 2007, a settlement agreement by and between StockerYale, Inc. and the lead plaintiffs in the pending consolidated securities class action lawsuit was submitted to the U.S. District Court for the District of New Hampshire for preliminary approval. Under the terms of the proposed settlement, plaintiffs would receive $3.4 million, which would be paid by the Company's insurance carrier. The settlement would resolve all claims asserted against the Company and the individual defendants. ... The settlement is conditioned on preliminary court approval and final court approval after notice to the plaintiff class and expiration of the time for appeal from any order of the Court approving the settlement. There can be no assurance that final approval of the settlement will be obtained.
As summarized by the Company’s FORM 10-QSB For The Quarterly Period Ended September 30, 2006, beginning in May 2005, three putative securities class action complaints were filed in the United States District Court for the District of New Hampshire against the Company and certain individual defendants. The three complaints were consolidated into one action and assigned to a single federal judge. The court also appointed a group of lead plaintiffs and plaintiffs’ counsel who filed a consolidated amended complaint to supersede the previously filed complaints. The Company’s former Chief Financial Officer is not named as a defendant in the amended complaint; therefore, he is not a party to the currently pending proceeding. The consolidated amended complaint asserts claims under Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. On January 31, 2006, the Company and the individual defendants moved to dismiss all claims asserted in the consolidated amended complaint. The United States District Court for the District of New Hampshire ruled on Sept. 29, 2006 for the plaintiffs.
The original complaint charges that StockerYale and certain of its officers and directors violated Securities 10(b) and 20(a) of the Securities and Exchange Act by issuing false and misleading press releases on April 19 and April 21, 2004 in which the Company falsely announced in had entered into a contract with BAE Systems to develop a laser for a missile countermeasure system to protect commercial planes. In addition, the press releases misrepresented that StockerYale was supplying the lasers as part of a Department of Homeland Security project. In fact, StockerYale was not involved in any Department of Homeland Security project and was not developing a laser missle countermeasure system for commuter planes.
The complaint further alleges that within minutes of the first Press Release on April 19, StockerYale's share priced surged as a result of the positive announcement. StockerYale's CEO sold 250,000 shares for over $1.6 million the next day. A StockerYale director sold 56,900 shares of stock for over $350,000.
On or around May 23, 2005 the SEC announced it had entered into a consent judgment settling charges against StockerYale and its CEO.