According to a press release dated December 04, 2010, the complaint alleges that defendants each failed to conduct an adequate due diligence investigation into the Company prior to the IPO, and they also each failed to reveal, at the time the IPO closed – which occurred almost one third of the way through the fiscal second quarter of 2011, the period ended September 30, 2010 – that the Company was not proceeding according to plan and that SMART Technologies’ sales already had been adversely impacted by a slowdown during fiscal 2Q:11 which would make it impossible for SMART Technologies to achieve its projected rates of growth, earnings, revenues, and profits.
It was only on November 9, 2010, after the close of trading – and after Company insiders liquidated over $510.51 million of their privately held shares in or in connection with the IPO – that SMART Technologies revealed the truth about the Company, including that the problems which existed at the time of the IPO would result in extremely disappointing results for the fiscal second quarter of 2011 – including a decline in quarterly profits of at least 22% – and that the outlook for the remainder of the year continued to be adversely impacted.
The following trading day, on the publication of this news, SMART Technologies stock price declined precipitously. As evidence of this, the following day, as shares of the Company resumed trading, shares of SMART Technologies fell over 30%, plummeting from $13.07 per share on November 9, 2010, to close at $8.91 per share the following day. On November 10, 2010, SMART Technologies also experienced exceptionally heavy trading volume with over 17.84 million shares traded, more than ten times the Company’s recent average daily trading volume.
On February 4, 2011, the plaintiff in the first filed complaint voluntarily dismissed the action without prejudice.
A similar, purported class action complaint was filed in the U.S. District Court for the Northern District of Illinois on January 26, 2011, under caption McKenna et al v. Smart Technologies, Inc. et al, case number 11-CV-00583. The action is continuing in the Illinois federal court.
On June 16, 2011, the Honorable Edmond E. Chang granted the motion of the City of Miami General Employees' and Sanitation Employees' Retirement Trust for appointment as lead plaintiff and approval of its selection of lead counsel. Bernstein Litowitz Berger & Grossman LLP is appointed lead counsel.
On June 17, 2011, the Court released an order releasing Michael Weininger and Lupel Weininger LLP as counsel for plaintiff Thomas McKenna.
According to the Notice of Voluntary Dismissal filed on August 19, 2011, the lead plaintiffs voluntarily dismisses Morgan Stanley & Co. Incorporated, Deutsche Bank Securities, Inc. and RBC Dominion Securities Inc. (the “Underwriter Defendants”) from this action pursuant to Federal Rule of Civil Procedure 41(a)(1) without prejudice and without costs. This voluntary dismissal of claims against the Underwriter Defendants is not intended to affect Lead Plaintiff’s claims in this case against any Defendant other than the Underwriter Defendants.
On August 24, 2011, the Honorable Edmond E. Chang dismissed the underwriter defendants from the action without prejudice.
On October 14, 2011, the Honorable Edmond E. Chang granted the motion to transfer the case from the United States District Court for the Northern District of Illinois to the Southern District of New York.
On November 4, 2011, an amended complaint was filed by the plaintiffs against the defendants.
On April 3, 2012, an opinion and order was granted in part and denied in part.
On April 23, 2012, a second amended complaint was filed by the plaintiffs against the defendants.
On August 21, 2012, the Court issued an Order denying the Defendants' motion to dismiss.