Bernstein Liebhard LLP Announces That A Class Action Has Been Filed Against OSI Systems, Inc.
December 17, 2013
Bernstein Liebhard LLP today announced that a class action lawsuit has been commenced in the United States District Court for the Central District of California on behalf of purchasers of securities (the “Class”) of OSI Systems, Inc. (“OSI”) (NASDAQ: OSIS) during the period of January 24, 2012 and December 6, 2013 (the “Class Period”).
OSI produces medical monitoring and anesthesia systems, security and inspection systems, and lasers, optics, and optoelectronic components.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company manipulated operational tests of its Advanced Imaging Technology by selectively picking the best sensors, causing the test to be unrepresentative of the scanners already deployed at airports; (ii) the Company’s products raised strong privacy concerns and were subject to disqualification for use in airport security checkpoints; (iii) the Company manufactured its products with parts that directly violated contracts with the Transportation Security Administration (“TSA”), thereby risking cancellation of the contracts; and (iv) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
On November 14, 2012, after the market closed, various news sources, including Bloomberg News reported that a Congressman disclosed that the Company may have committed fraud by “knowingly manipulating” the results of an operational test in connection with the Company’s Advanced Imaging Technology (“AIT”), otherwise commonly known as body scanners. Moreover, Bloomberg News cited to an executive vice president of the Company who revealed that its Rapiscan unit had received a so-called “show cause” letter from the TSA on November 9, 2012, seeking detailed information about the testing of technology used in its body scanners. On this news, OSI shares declined $21.40 per share or 28%, to close at $54.89 per share on November 15, 2012.
On January 22, 2013, the TSA reported that it had ended its contract with the Company – and that OSI would have to bear the costs of removing all Rapiscan full body scanners from airports – because TSA administrators concluded that the Company could not meet a Congressional deadline to produce generic passenger images. On this news, the Company’s shares fell $14.03 per share to $57.33, a one day decline of over 19%.
Thereafter, on December 6, 2013, the TSA canceled a $60 million contract for the Company’s carry-on baggage screening equipment, with the possibility of a future ban on contracting with the Department of Homeland Security. The reason for the canceled contract and future ban was that a part in the Company’s baggage scanning machine was manufactured in China, violating TSA security policies. On this news, the Company’s shares fell $21.69 per share to $43.63, a decline of over 33% on December 6, 2013.
Plaintiffs seek to recover damages on behalf of all Class members who invested in OSI securities during the Class Period. If you invested in OSI securities as described above, and either lost money on the transaction or still hold the security, you may wish to join in this action to serve as lead plaintiff. In order to do so, you must meet certain requirements set forth in the applicable law and file appropriate papers no later than January 10, 2014.
A “lead plaintiff” is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiff. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Bernstein Liebhard LLP, or other counsel of your choice, to serve as your counsel in this action.
Bernstein Liebhard LLP has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients. It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last ten years.
You can obtain a copy of the complaint from the clerk of the court for the United States District Court for the Central District of California.