On March 21, 2006 the plaintiff voluntarily dismissed the case, which was then administratively closed.
According to a press release dated February 28, 2006, the complaint charges GrafTech and certain of its officers and directors with violations of the Securities Exchange Act of 1934. GrafTech provides synthetic and natural graphite and carbon-based products, as well as technical and R&D services. Its synthetic graphite products include: graphite electrodes, cathodes, and advanced synthetic graphite products.
Specifically, the complaint alleges that during the Class Period, defendants made materially false and misleading statements regarding the Company's business prospects, which served to artificially inflate the price of the Company's securities. Specifically, defendants knew and concealed that: (i) pricing power for the Company's graphite electrode products was nonexistent, particularly in the European markets; (ii) announced cost-cutting measures were insufficient to improve the Company's bottom line; (iii) contraction in the non-graphite market was contributing to the Company's financial woes; (iv) the Company was unable to accurately forecast growth and report guidance; and (v) the Company's inability to determine the required extent of its restructuring activities and charges necessary to counter the costs of its staggering debt and loss of pricing power grossly understated the true costs the Company would incur in restructuring.
The complaint further alleges that on or around February 8, 2006, GrafTech revealed the truth about its business prospects. As a result, the price of GrafTech shares plunged 37.0%, on unusually high volume, falling from $7.31 per share on February 8, 2006 to $4.60 per share on February 9, 2006, for a one-day drop of $2.71 per share, on volume of 9.8 million shares, nearly twelve times the average daily trading volume.