According to the law firm press release, OCZ engages in the design, manufacture and distribution of high-performance solid-state storage solutions and premium computer components. The Complaint alleges that throughout the Class Period the Company and certain of its executive officers made false and/or misleading statements and/or failed to disclose that: (1) the Company was providing extraordinary customer incentives in excess of what was normal and customary in the past; (2) the Company was improperly accounting for customer incentive programs; (3) as a result, the Company’s financial results were misstated during the Class Period; (4) the Company lacked adequate internal and financial controls; (5) as a result, defendants’ statements were materially false and misleading; and (6) as a result of the foregoing, defendants’ positive statements about OCZ’s business, operations and prospects lacked a reasonable basis.
On September 5, 2012, the Company announced that for the 2013 fiscal second quarter, which ended on August 31, 2012, it expected preliminary revenue to be approximately $110 to $120 million, compared to the previously guided revenue range of $130 to $140 million.
Then, on October 10, 2012 the Company announced that it will file a Form 12b-25 Notification of Late Filing with the SEC, to extend the deadline to file OCZ’s second quarter 2013 financial results. According to the Company, OCZ’s second quarter 2013 “revenue will be materially lower than the September 5 preliminary revenue range of $110 to $120 million…principally due to the impact of customer incentive programs which were discovered subsequent to the preliminary announcement during the normal close process, and which the Company will be reporting as a material weakness in its Form 10-Q.” Moreover, the Company “also expects to report negative gross margins and a significant net loss” for second quarter 2013.
On this news, the Company’s shares declined $1.27 per share, or more than 40%, to close on October 10, 2012 at $1.88 per share on unusually heavy volume.
On January 3, 2013, an Order Consolidating Cases and Appointing the OCZ Technology Group as Lead Plaintiff was issued by the Court.
On March 5, 2013, a Consolidated Amended Class Action Complaint for Violation of Federal Securities Laws was filed by the lea plaintiffs against the defendants.