KLIC Class Action Report
Levi & Korsinsky, LLP
May 23, 2018
On May 11, 2018, investors sued Kulicke and Soffa Industries, Inc. (“Kulicke and Soffa” or the “Company”) in United States District Court, Central District of California. The federal securities class action alleges that plaintiffs acquired Kulicke and Soffa stock at artificially inflated prices between November 16, 2017 and May 10, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s everything you need to know about the Kulicke and Soffa class action lawsuit (KLIC class action lawsuit):
Summary of the Allegations
The Company (NASDAQ: KLIC) is a self-described “leading provider of semiconductor packaging and electronic assembly solutions” for customers in the “global automotive, consumer, communications, computing, and industrial segments.” In other words, it creates, makes and sells capital equipment and disposable tools to needed to make semiconductor devices.
Founded in 1951, the Company was incorporated five years later. It has been publicly trade since 1961 and now has more than 3,100 employees.
Summary of Facts
Kulicke and Soffa and two of its current and/or former senior officers and/or directors are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.
Specifically, they are accused of omitting truthful information about the accuracy of certain financial statements from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Kulicke and Soffa stock to trade at artificially inflated prices during the time in question.
The truth came out when the Company issued a press release after the market closed on May 10, 2018. In it, Kulicke and Soffa revealed that it was forced to delay the filing of its Quarterly Report with the SEC. The Company also disclosed that it was forced to delay filing due to an investigation “into certain unauthorized transactions by a senior finance employee of the Company,” and the discovery that “certain warranty accruals in prior periods had been accounted for incorrectly and therefore [were] misstated.”
A closer look…
As alleged in the May 11 complaint, the Kulicke and Soffa made several misleading public statements on a form filed with the SEC during the Class Period.
On the form, which it filed with the SEC on November 16, 2017, the Company said that it “recognizes revenue and establishes reserves for warranty expenses in accordance with ASC No. 605.”
On the same form, the Company included “reserve for product warranty activity for fiscal 2017, 2016 and 2015.” It also said in pertinent part: “The Company establishes reserves for estimated warranty expense when revenue for the related equipment is realized. The reserve for estimated warranty expense is based upon historical experience and management’s estimate of future warranty costs.”
However, the complaint alleges that the Company failed to disclose any accounting errors regarding involving warranty accruals and adverse effects of these errors on its consolidated financial statements for the fiscal year that ended on September 30, 2017, until it issued its May 10 press release.
Impact of the Alleged Fraud on Kulicke and Soffa’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is July 10, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Kulicke and Soffa common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
|This information is provided for general information purposes only, and should not be construed as legal advice, nor does it establish an attorney-client relationship with Levi & Korsinsky LLP. Any and all information herein is simply an opinion based on publicly available information and should not necessarily be construed as fact. For more information, please visit our website at www.zlk.com.
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.
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