PEMSTAR, Inc. is a provider of electronics manufacturing services to OEMs in the communications, computing, data storage, industrial and medical equipment markets.

The original Complaint charges PEMSTAR and certain of the Company's executive officers with issuing materially false and misleading financial statements to the investing public regarding the Company's financial condition and outlook in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b 5 promulgated thereunder.

Specifically, the Complaint alleges that during the Class Period, Defendants issued numerous positive statements that misrepresented the true financial status of the Company and its business prospects. In fact, throughout the Class Period, PEMSTAR suffered from extensive liquidity constraints that inhibited the Company's ability to achieve the necessary gross margin expansion that was required for the Company to create and sustain accounting profits. The Complaint alleges that the Defendants failed to disclose that the Company needed gross margins of at least 9% in order to achieve profitability, a level which Defendants knew it was years away from attaining, if ever. Moreover, Defendants further misrepresented the Company's financial condition by understating its liabilities associated with its Mexican facilities and overstating the Company's accounts receivables which had become materially impaired. The Complaint alleges that, in part, Defendants carried out the fraudulent scheme in order to revive and strengthen the Company's image, as perceived by its customer base, and enable the Company to raise much needed capital through the issuance of its common stock to the public at levels advantageous to the Company.

The Complaint further alleges that on or around January 24, 2005, the Company issued a press release announcing that it was revising its outlook for the fiscal 2005 third quarter, implementing additional cost-reduction initiatives and restating its financial results for its fiscal year ended March 31, 2004, due to accounting discrepancies at its Mexico facility. By the time the Company made this disclosure, the Company's common stock had declined nearly 70% from its Class Period high.

On October 26, 2005, the Court entered the Order appointing Lead Plaintiff and Counsel. On November 28, 2005, Lead Plaintiff filed a Consolidated Complaint. Defendants filed a motion to dismiss the Consolidated Complaint on January 17, 2006. On March 29, 2006, the Court entered an Order denying the Defendants’ motion to dismiss.

The parties entered into a Stipulation for Settlement on March 30, 2007. The Court granted preliminary approval of the Settlement on June 5. On November 9, the Court granted final approval of the Settlement, including an award of Attorneys’ Fees and Expenses, and entered Final Judgment.

On December 15, 2008, the Court issued an Order authorizing distribution of the Settlement funds.