According to a press release dated February 1, 2012, the complaint charges the Company 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 financial results. Specifically, defendants failed to disclose operational problems at the Company’s Lucky Friday silver mine. As a result of defendants’ false statements, Hecla’s stock traded at artificially inflated prices during the Class Period, reaching a high of $11.34 per share on December 29, 2010.
Due to a series of accidents at the Lucky Friday mine during 2011, the Mine Safety and Health Administration (“MSHA”) engaged in a close inspection of the mine. In early December, MSHA issued an accident report accusing Hecla of safety failures that led to the death of a miner in April 2011. Thereafter, on January 5, 2012, MSHA issued a closure order for the Lucky Friday mine for the removal of built-up material in the shaft that had been leaking from a pipe into the shaft for a number of years. On January 11, 2012, the Company announced that the Lucky Friday mine would be closed for up to a year based upon MSHA’s order. As a result of the closure, the Company reduced its estimated silver production for 2012 from more than 9 million ounces to around 7 million ounces. On this news, the Company’s stock dropped $1.23 per share, to close at $4.61 per share on January 11, 2012, a one-day decline of 21%.
According to the complaint, during the Class period, defendants knew but concealed from the investing public the following adverse facts: (a) the Company was not in compliance with safety regulations at its Lucky Friday mine; (b) the Company had allowed sand and concrete material to improperly build up in the mine shaft over a period of years, creating a safety hazard; (c) following the December closure, the Company would be unable to reestablish mining operations at the Lucky Friday mine by February 2012, as the Company had previously represented; (d) the Company improperly accounted for its contingent liabilities in violation of Generally Accepted Accounting Principles; and (e) based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s operations and its expected silver production.
On April 17, 2012, an Order consolidating cases under case 12-CV-00042 as the lead case.
On July 12, 2012, the Court issued an order on the Motions to Appoint Lead Plaintiffs and Appoint Counsel.
On October 16, 2012, a Consolidated Amended Complaint for Violation of the Federal Securities Laws was filed by the plaintiffs against the defendants.
On September 26, 2013, the Court issued an Order granting the Defendant's motion to dismiss with leave to amend.
On November 05, 2013, the Court ordered, adjudged, and decreed that judgment be entered in favor of defendants, and that this case be dismissed in its entirety with prejudice