According to a press release dated March 16, 2009, the complaint charges STLD and certain of its officers and directors with violations of the federal securities laws by making false and misleading statements regarding the Company's business and financial results. Defendants failed to disclose that: a) demand for STLD's products showed continuing weakness in Q1 2009; b) STLD's inventories in its Flat Roll Division were at excessive levels and were materially impaired by approximately $70 million; c) given the continuing weakness in demand for STLD's products in Q1 2009, and in the absence of any existing facts to indicate or exhibit a reversal in that adverse trend, as well as the impaired value of inventories in STLD's Flat Roll Division, defendants lacked a reasonable basis in fact for their earnings guidance for Q1 2009; and d) Defendant Bates engaged in unusual insider selling and realized proceeds of in excess of $30 million.
When defendants disclosed the truth to the market on March 11, 2009, the price of STLD's common stocked dropped 15% to close at $7.25, on volume of more than 33 million shares, many times the average trading day volume for STLD common stock.
On May 27, 2009, David Ross and David John Thomas were appointed as lead plaintiffs and the Court further approved the Law Offices of Bernard M. Gross, P.C., as lead counsel; Cohen & Malad, LLP, as liaison counsel; and Theisen Bowers & Associates, LLC, as local counsel. On July 13, 2009, the lead plaintiffs filed an Amended Class Action Complaint. On August 31, 2009, the defendants filed two motions to dismiss the Amended Class Action Complaint. On December 21, 2009, Judge Theresa L. Springmann granted the motion to dismiss the Amended Class Action Complaint.