The action charges OmniVision and certain of its officers with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Complaint alleges that the company's financial results were artificially inflated by virtue of the fact that the company had concealed the loss of its exclusive contract with Apple to supply imaging sensors for Apple's celebrated iPhone.
Update: ElecroIQ gives details of one more lawsuit from a different lawyer:
"The complaint alleges that OmniVision and certain of its officers and directors misrepresented and/or failed to disclose that:
(a) the Company had lost its exclusive contract with Apple Inc. ("Apple") regarding the supply of imaging sensors for the Apple iPhone;
(b) delays in the development of its 8-megapixel product line threatened its financial prospects;
(c) competition within the smartphone industry threatened the Company's leadership position;
(d) as a result of the aforementioned, defendants lacked a reasonable basis for their positive statements about the Company and its prospects."
Update #2: Business Wire-1, Business Wire-2: Two more lawyer offices filed suits against Omnivision with basically same claims:
"The investigation focuses on whether certain individuals violated federal securities laws by failing to disclose that:
(1) OmniVision had lost its lucrative image sensor contract with Apple, Inc. (“Apple”);
(2) the Company was losing its prominent position in the smartphone market; and
(3) delays in the development of its 8-megapixel product line were threatening OmniVision’s future prospects."
Update #3: More and more lawyers filing the lawsuits on the same matter: msn, lawyersandsettlements.com.
Update #4: PR Newswire: Hagens Berman Sobol Shapiro LLP announced that its investigation of OmniVision is deepening in light of OmniVision's announcement on Nov. 7 that it was once again revising guidance lower, taking the numbers for the next quarter down approximately an additional 20 percent --- and simply referring to "unexpected cutback in orders for certain key projects."
This follows the revelation that management sold over $12 million in OVTI stock at a time when it was experiencing production delays and the company was losing its exclusive contract with Apple to provide imaging sensors for the Apple iPhone.
"We are trying to determine when OmniVision discovered its production problems and learned it would not be providing the imaging sensors in the iPhone 4S," said Hagens Berman partner Reed R. Kathrein. "If the company knew of these problems when management was dumping stock, it was obligated to report the news to investors."
