According to the law firm press release, L-3 is a prime contractor in aerospace systems and national security solutions. L-3 is also a leading provider of a broad range of communication and electronic systems and products used on military and commercial platforms. Through its subsidiary, L-3 Communications Corporation, L-3 provides command, control, communications, intelligence, surveillance, and reconnaissance systems; aircraft modernization and maintenance; and national security solutions in the United States and internationally.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's Aerospace Systems segment. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) L-3's financial statements contained errors related to the improper deferral of cost overruns on a fixed-price maintenance and logistics support contract resulting in overstatement of operating income; (2) net sales with respect to the fixed-price maintenance and logistics support contract were overstated; (3) the Company lacked adequate internal controls over financial reporting; and (4) as a result of the foregoing, the Company's financial statements were materially false and misleading at all relevant times.
On July 31, 2014, before the markets opened for trading, L-3 announced preliminary results due to the disclosure of a concurrent internal accounting review into matters at the Company's Aerospace Systems segment. As a result of its preliminary review, which is still ongoing, the Company announced that it expects to incur an aggregate pre-tax charge of $84 million against operating income and a related reduction in net sales of approximately $43 million.
On this news, shares of L-3 fell $14.68, or more than 12%, on extremely heavy volume, to close at $104.96 on July 31, 2014.
On October 20, 2014, the Court issued an Order consolidating cases, appointing lead plaintiffs and lead counsel.
On February 22, 2017, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved on March 10.