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15 July 2013

Investor lawsuit against SemiLEDs alleges securities laws violations over misleading statements

An investor who purchased shares of LED chip and component maker SemiLEDs Corp has filed a lawsuit in the US District Court for the Southern District of New York over alleged violations of Federal Securities Laws by SemiLEDs in connection with certain allegedly false and misleading statements made between 9 December 2010 and 12 July 2011.

According to the complaint, the plaintiff alleges, on behalf of purchasers of SemiLEDs’ common stock between 9 December 2010 and 12 July 2011, that SemiLEDs and certain of its officers violated the Securities Exchange Act of 1934.

More specifically, the plaintiff alleges that defendants failed to disclose that: SemiLEDs was experiencing known, but undisclosed, pricing pressures for its products which were reasonably likely to have a material adverse effect on SemiLEDs’ future revenues and operating income, that known events or uncertainties - including the reduction in demand for SemiLEDs’ products, the likely (and ultimate) loss of a large customer, and the decline in the value of SemiLEDs’ inventory - were reasonably likely to cause SemiLEDs’ financial information not to be indicative of future operating results; that SemiLEDs’ disclosure controls were materially deficient and its representations concerning them were materially false and misleading; that the certifications issued by defendants associated with the company’s disclosure controls were materially false and misleading; and that, based on the foregoing, defendants lacked a reasonable basis for their positive statements about SemiLEDs, and its then current business and future financial prospects.

SemiLEDs reported that its revenue rose from $11.55m for the 12 months to end-August 2009 to $35.76m for the 12 months to end-August 2010, and that its net loss of $3.69m for 12 months to end-August 2009 turned into a net income of $10.83m for the 12 months to end-August 2010. SemiLEDs’ shares traded in December 2010 as high as $29.50 per share.

SemiLEDs reported its results for fiscal third-quarter 2011 on 7 July 2011 and its results for fiscal fourth-quarter and full-year 2011 that November. The shares fell from almost $30 at the end of 2010 to under $3 at the end of 2011. On 12 July 2012, NASDAQ:LEDS shares closed at $1.33.

Law firm Shareholders Foundation Inc of San Diego, CA, USA says that investors who purchased SemiLEDs’ shares between 9 December 2010 and 12 July 2011, and/or those who purchased NASDAQ:LEDS shares prior to December 2010 and currently hold any of those shares, have certain options and, for certain investors, there are short and strict deadlines running. NASDAQ:LEDS investors should contact Shareholders Foundation at or call +1(858)-779-1554, by 9 September.

See related items:

SemiLEDs’ revenue falls a further 5% due to delayed China lighting demand

SemiLEDs’ quarterly revenue drops a further 43%

SemiLEDs’ IPO raises $79m in net proceeds

Tags: SemiLEDs



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