Press release from Business Wire
Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Magna International Inc.
Friday, May 04, 2012
Robbins Geller Rudman & Dowd LLP Files Class Action Suit Against Magna International Inc.14:39 EDT Friday, May 04, 2012 NEW YORK (Business Wire) -- Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/magna/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of Magna International Inc. (“Magna”) (NYSE:MGA) common stock during the period between January 12, 2011 and August 5, 2011 (the “Class Period”). If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/magna/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. The complaint charges Magna and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Magna is a one of the largest and most diversified suppliers of automotive components, systems and modules world-wide. Magna maintains manufacturing and engineering and sales operations in 26 countries around the globe. The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company's business and prospects. Specifically, defendants misrepresented and/or failed to disclose the following adverse facts: (i) that the Company had entered into long-term European customer contracts at steeply discounted prices; (ii) that the Company was experiencing ongoing undisclosed quality control issues at its European facilities that were resulting in higher production costs; (iii) that, as a result of the foregoing, Magna was experiencing a significant decline in its European margins; (iv) that defendants' representations about the Company's disclosure controls were materially false and misleading; and (v) that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about the Company's European operations and business prospects during the Class Period. On August 5, 2011, Magna issued a press release announcing its operating results for its 2011 fiscal second quarter, the period ended June 30, 2011. For the quarter, the Company announced net income of $282 million, or $1.15 per diluted common share, significantly less than Wall Street estimates. Following the Company's 2011 second quarter earnings announcement, defendants held a conference call with analysts and investors wherein it was explained that, while Magna's year-over-year sales increased by 24%, the Company's weaker than expected results were primarily caused by long standing, under-priced European customer contracts and quality control issues in Europe. In response to the revelations about the Company's European operations, the price of Magna common stock dropped from $44.24 per share on August 4, 2011 to $39.42 on August 5, 2011, as the artificial inflation came out of the price of Magna stock. Plaintiff seeks to recover damages on behalf of all purchasers of Magna common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud. Robbins Geller represents U.S. and international investors and consumers in contingency based complex litigation. With nearly 200 attorneys in nine offices, the firm represents more institutional investors and pension funds in securities and corporate litigation than any other law firm in the world. Not only has the firm obtained six of the largest recoveries in history, but the firm has been ranked number one in the number of shareholder class action recoveries in MSCI's Top SCAS 50 every year since 2003. According to Cornerstone Research, the firm's recoveries have averaged 35% above the median for all firms over the past seven years (2005-2011). Please visit http://www.rgrdlaw.com for more information. Robbins Geller Rudman & Dowd LLPSamuel H. Rudman, 800-449-4900David A. Rosenfelddjr@rgrdlaw.com