Securities Class Action Filed Against MagnaChip Semiconductor Corporation
Violations of federal securities laws as a result of a series of materially false statements. The Complaint alleges that, during the Class Period, the Company failed to disclose that it was improperly recognizing revenues, resulting in its prior financial statements overstating its revenues and earnings in 2011, 2012, and the first nine months of 2013. As a result of Defendants’ false statements, MagnaChip securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $23.57 per share on October 21, 2013, at which time MagnaChip’s controlling shareholder, Avenue Capital Management II, L.P., sold more than 16.1 million MagnaChip shares in secondary stock offerings and on the open market at fraudulently-inflated prices, receiving $232.675 million in gross proceeds. Following a January 2014 disclosure that it could not timely file its annual financial report for fiscal 2013, on March 11, 2014, MagnaChip announced that it would be restating its 2011, 2012 and 2013 financial results after concluding that it had “incorrectly recognized revenue on certain transactions,” stating it “expect[ed] that the primary impact of the correction of prior revenue recognition errors [would] be to recognize revenue on certain transactions in the periods in which the distributor ship[ped] the products to the end customer rather than the periods in which the products [were] shipped to distributors.” Then on February 12, 2015, after the market closed, MagnaChip filed its Annual Report on Form 10-K with the SEC for the fiscal year ended December 31, 2013, restating its financial results for fiscal years 2011, 2012, and the first three quarters of 2013, resulting in a total reversal of earnings by $142 million, wiping out 55% of its reported profits for those periods. The Complaint alleges that as a result of this news, MagnaChip’s shares plummeted $7.50 per share to close at $7.52 per share on February 13, 2015, a one-day decline of nearly 50%. Filed in N.D. Cal.
Lead Plaintiff Deadline: The deadline to file for lead plaintiff in this action is 6/22/2015.
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