The original complaint charges Celestica and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Celestica provides electronic manufacturing services to original equipment manufacturers in the computing, telecommunications, aerospace and defense, automotive, consumer electronics, and industrial sectors in Asia, the Americas, and Europe.
The complaint alleges that throughout the Class Period, defendants issued numerous statements describing the Company's financial performance and future prospects, which they attributed, in part, to success of the Company's restructuring activities and improvements in the Mexican and European operations. The complaint alleges that these statements were materially false and misleading when made because defendants failed to disclose and/or misrepresented the following adverse facts, among others: (i) that the Company was experiencing declining demand in its Mexican operations and that division was carrying significant amounts of unneeded inventory which would have to be written off; (ii) that the Company was experiencing declining demand in its Information Technology ("IT") and communications market segments as its larger customers scaled back purchases; and (iii) as a result of the foregoing, there was no reasonable basis to project adjusted earnings per share ranging from $0.12 to $0.20. When this undisclosed information later became public, shares of Celestica common stock declined.
NOTE: Onex is the parent company of Celestica.
On March 13, 2007, Pension Fund Group and West Virginia Laborers' Pension Trust Fund filed motions to consolidate cases and for the appointment of lead plaintiffs and lead counsels. According to the Order signed by U.S. District Court Judge George B. Daniels on October 11, 2007, the Pension Fund Group is appointed to serve as Lead Plaintiff and Labaton Sucharow & Rudoff LLP as Lead Counsel. The Order further states that every pleading in the Consolidated Action shall have the following caption “IN RE CELESTICA, INC., SECURITIES LITIGATION” under the Master File No. 07-CV-312-GBD and that the Consolidated Complaint should be filed by January 18, 2008. A consolidated complaint was filed by Pension Fund Group on November 21, 2007. The defendants filed two motions to dismiss in March 2008.
On October 14, 2010, Judge George B. Daniels signed the Memorandum Decision and Order granting the defendants' respective motions to dismiss to the complaint for failure to state a claim. The complaint is dismissed with prejudice, and the case was closed.
On November 15, 2010, the plaintiffs filed a Notice of Appeal in the Second Circuit Court of Appeals. On December 29, 2011, the Court entered the copy from the U.S. Court of Appeals. According to the Summary Order, because plaintiffs adequately pleaded scienter under the PSLRA, the district court erred in dismissing the complaint for failure to state a claim. The Court of Appeals have considered defendants’ remaining arguments for affirmance and find them to be without merit. The judgment entered on October 19, 2010, is reversed and the case is remanded for further proceedings consistent with this order.
On February 20, 2014, the Court issued an Order denying Plaintffs' motion to certify a class.
On August 20, 2014, the Court ruled on the Motions for Summary Judgment of both the plaintiffs and defendants. The defendants' motion was denied in its entirety. Plaintiffs' motion was granted in part and denied in part.
A stipulation of settlement between the parties was filed on April 17, 2015. This Settlement was preliminarily approved by the Court on May 6. The Court granted final approval of the Settlement and closed this case on July 28.