According to the docket, on April 30, 2003, a Stipulation of settlement was filed and on May 2, 2003, the Court entered the Order granting the application for preliminary approval of the settlement and setting the hearing date for the final approval of the settlement. The Notice of Pendency and Proposed Settlement of the Class Action announced that the settlement was in the amount of $5,250,000 in cash. On July 18, 2003, the Court further entered the Order granting reimbursement of attorneys’ fees and expenses and Judgment closing the case. Finally, on July 6, 2004, the Court granted the application for an order authorizing disbursement of net settlement fund.
The complaint charges Brightpoint and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
Specifically, the complaint alleges Defendants' public filings were made in contravention to Generally Accepted Accounting Principles ("GAAP") and violated their duty to promptly disseminate accurate and truthful information with respect to the Company's operations, business, products, markets, management, earnings, the discontinuation of its trading division and present and future business prospects, to correct any previously issued statements from any source that had become untrue, and to disclose any trends that would materially affect earnings and the present and future financial operating results of Brightpoint, so that the market price of the Company's publicly traded securities would be based upon truthful and accurate information.
On November 13, 2001, the Company announced that it will "restate its annual financial statements for 1998, 1999, 2000 and the interim periods of 2001" and that the primary cause of the restatement related to "previously reported (October 2, 1998) losses the Company had sustained in its trading division, an operation that the Company closed in 1998." The restated financial statements revealed that the true operating income for 1998 was approximately 38% less than originally reported and net income per share was actually less than half of the original amount.
The Company's announcement revealed that Brightpoint was plagued by internal inefficiencies with respect to financial control, inventory control and execution, and that defendants had been misleading shareholders regarding the true value of Brightpoint stock. Moreover, as a result of defendants' failure to disclose the true state of affairs of the Company, the price of Brightpoint's common stock was artificially inflated during the Class Period.
