Bernstein Liebhard LLP Announces That It Is Investigating Claims Against MagnaChip Semiconductor Corporation
February 13, 2015
Bernstein Liebhard LLP today announced that it is investigating possible claims against MagnaChip Semiconductor Corporation (“MagnaChip” or the “Company”) (NYSE: MX). The investigation concerns whether MagnaChip and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
MagnaChip is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer, computer and communication applications.
On March 11, 2014, MagnaChip announced that it would be restating its 2011-2013 results after concluding that it had “incorrectly recognized revenue on certain transactions.”
On March 28, 2014, MagnaChip announced that Margaret Sakai had resigned as CFO and executive vice president, effective immediately, and that Senior Vice President and Chief Accounting Officer Jonathan Kim would stand as interim CFO until a replacement had been found.
It took almost one year for the Company to figure out its accounting and finalize its restatement. On February 13, 2015, MagnaChip announced that it had completed its restatement of fiscal years 2011, 2012, and the first three quarters of 2013. The restatement was purportedly caused by a host of accounting errors, including revenue recognition, cost of goods sold, inventory reserves, capitalization, expense recognition and allocation, as well as related business practices, for distributor, non-distributor customers and vendors. The restatement was substantial – reducing net income for 2011 and 2012 by approximately 50% and 45%, respectively.
On this news, MagnaChip stock went into free fall, dropping almost 50% in intra-day trading on February 13, 2015.
Jonathan Kim, interim Chief Financial Officer and Chief Accounting Officer for MagnaCip, commented: “The management team and the Board are intensely focused on improving our internal controls, including our control environment and our corporate culture, to ensure that we have the right processes, people and financial discipline in place. We believe we have made solid progress to date, and we expect to fully address all of the material weaknesses in internal control over financial reporting described in our filings today by the end of 2015.”
If you lost money in MagnaChip, or are interested in discussing your rights as a MagnaChip shareholder and/or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or firstname.lastname@example.org.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. The National Law Journal has recognized Bernstein Liebhard for twelve consecutive years as one of the top plaintiffs’ firms in the country.