SiRF Technology Holdings, Inc. ("SiRF" or the Company), through its subsidiaries, engages in the development and marketing of semiconductor and software products that are designed to enable location-awareness utilizing global positioning system and other location technologies worldwide.
The original Complaint charges SiRF and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The Complaint alleges that during the Class Period, Defendants issued materially false and misleading statements regarding the Company' s business and prospects. As a result of Defendants' false statements, SiRF stock traded at artificially inflated prices during the Class Period, permitting one of the Defendants to sell $9.6 million worth of his SiRF stock at $24.18-$24.29 per share.
On February 4, 2008, after the market closed, the Company announced disappointing financial results for its fourth quarter and fiscal 2007. On February 5, 2008, SiRF's stock collapsed $8.91 per share to close at $7.36 per share, a one-day decline of 54%.
According to the Complaint, the true facts, which were known by the Defendants but concealed from the investing public during the Class Period, were as follows: (a) SiRF's acquisition of Centrality Communications, Inc. ("Centrality") was having an adverse impact on SiRF's results due to the similar products sold by Centrality which were cannibalizing SiRF' s sales; (b) SiRF's major customers were not placing orders at sufficient quantities for SiRF to meet the aggressive targets set by and for the Company; (c) Centrality' s System-on-Chip ("SoC") product line had lower gross margins than SiRF's products and Defendants knew that although the Centrality acquisition would increase revenues in the fourth quarter (as it did), it would also significantly lower SiRF's gross margins (as it also did); (d) competitive pressures were having much more of an adverse impact on the Company than acknowledged by Defendants, as SiRF's customers were moving to cellular-enabled products which SiRF could not adequately compete with; (e) as of October 30, 2007, one month into the fourth quarter, fourth quarter gross margins would be down significantly because of the lower SoC product line margins; and (f) downward pricing pressures were accelerating and would lead to lower margins and earnings in future quarters.
On March 14, 2008, U.S. District Court Judge Maxine M. Chesney consolidated several related cases and established 08-CV-00856, In re SiRF Technology Holdings, Inc. Securities Litigation, as the Master Docket. On May 27, 2008, the Court granted the motion to appoint the Police & Fire Retirement System of the City of Detroit as lead Plaintiff and approved lead Plaintiff’s choice of Kirby McInerney LLP as lead Counsel. On July 28, 2008, the lead Plaintiff filed an Amended Complaint. The Defendants responded by filing a motion to dismiss the Amended Complaint.
According to an article dated July 28, 2009, a class of shareholders has asked a federal judge to approve a $2.9 million settlement with SiRF in a suit stemming from steep stock losses following SiRF's acquisition of Centrality. In a motion filed Monday in the U.S. District Court for the Northern District of California, the Plaintiffs in the case asked Judge Maxine H. Chesney to provide preliminary approval of the deal as well as of a settlement class in the case. A hearing on the settlement was scheduled for Aug. 7.
On August 14, 2009, Judge Chesney preliminarily approved the settlement. The Final Approval Hearing was set for January 8, 2010. On January 8, 2010, Judge Maxine M. Chesney signed the Order and Final Judgment approving the settlement, approving the plan of allocation, and granted the motion for attorney fees and reimbursement of expenses. The action has been dismissed with prejudice.
