According to a press release dated May 19, 2011, the complaint charges Oclaro and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Oclaro is a leading provider of high-performance core optical network components, modules and subsystems to global telecom equipment manufacturers.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s current business and financial condition, including projections for its first quarter 2011 and fiscal 2011 revenues, earnings and gross margins. As a result of defendants’ false statements, Oclaro stock traded at artificially inflated prices during the Class Period, reaching a high of $17.07 per share on October 17, 2010.
On October 28, 2010, before the market opened, Oclaro reported first quarter 2011 earnings per share of $0.01 as compared to analyst estimates of $0.22. The Company also posted sequential gross margin declines and reported that its anticipated second quarter 2011 revenues, earnings and gross margins, which it had previously indicated would post accelerated gains, would also be down, all as a result of sudden customer inventory corrections and weak demand visibility, among other things. On this news, Oclaro’s stock price fell 37% to close at $8.60 per share on October 28, 2010, from a close of $13.68 per share on October 27, 2010, on high volume.
According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) demand for Oclaro’s products, which have sales cycles of one year, was flat or declining well before October 28, 2010; (b) the Company did not have a reasonable basis for its forecast of accelerated gross margin growth or that orders for Oclaro products would cover forecasted financial results; and (c) Oclaro’s capacity to meet forecasted revenues, earnings, and margin growth was severely compromised.
On July 20, 2011, the Court issued an order consolidating the following cases under one docket: Guindani v. Couder, et al. 11-cv-03176-PSG June 27, 2011; Coney v. Couder, et al. 11-cv-03214-HRL June 28, 2011; and Braman v. Couillaud, et al. 11-cv-03322-RS July 7, 2011. Further, the court consolidated the derivative action titled Westley v. Oclaro, Inc., 14 Case No. 3:11-CV-02448.
On March 27, 2012, the Court issued an order granting defendants' motion to dismiss and dismissing this case without prejudice. Plaintiffs were given thirty days from the date of this order to file an amended complaint. On April 26, 2012, the Plaintiffs filed a second amended complaint.
On September 21, 2012, the Court issued an Order granting the Defendants' motion to dismiss. Plaintiffs were given leave to amend their complaint. Plaintiffs filed their amended complaint on March 1, 2013.
On May 30, 2013, the Court issued an Order granting the Defendants' motion to dismiss. All claims based on the July/August 2010 statements were dismissed with prejudice. The Court also dismissed with prejudice any and all claims against a certain individual defendant.
On February 5, 2014, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved the the Court on May 5th.