Caesarstone Sdot-Yam Ltd (NASDAQ: CSTE) Investor Securities Class Action Lawsuit 08/25/2015

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Company Name(s): 
Caesarstone Sdot-Yam
Case Name: 
Caesarstone Sdot-Yam Shareholder Class Action Lawsuit 08/25/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: CSTE
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/25/2015
Class Period Begin: 
02/12/2014
Class Period End: 
08/18/2015
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
10/26/2015
Date Settled: 
05/05/2017
Settlement Amount: 
$2,200,000
Deadline to Participate in Settlement: 
09/15/2017
Summary: 

May 5, 2017 - The court preliminarily approved the settlement.

April 14, 2017 - Parties filed a stipulation of settlement.

July 20, 2016 - The court granted in part and denied in part defendants' motion to dismiss.

January 15, 2016 - The lead plaintiffs filed an amended complaint on behalf of investors who purchased Caesarstone Sdot-Yam Ltd (NASDAQ: CSTE) common shares between February 12, 2014 and August 18, 2015. The lead plaintiffs allege that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between February 12, 2014 and August 18, 2015.

November 17, 2015 - Lead plaintiffs and lead counsel were appointed.

August 25, 2015 - An investor in shares of Caesarstone Sdot-Yam Ltd (NASDAQ: CSTE) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Caesarstone Sdot-Yam Ltd in connection with certain allegedly false and misleading statements made between March 25, 2013 and August 18, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of Caesarstone Sdot-Yam Ltd (NASDAQ:CSTE) common shares between March 25, 2013 and August 18, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between March 25, 2013 and August 18, 2015 Defendants made false and/or misleading statements and/or failed to disclose that the cost of quartz rose substantially by approximately 20% in 2014 while Caesarstone Sdot-Yam Ltd claimed in SEC filings the impact of the price increase was just 4%, that independent lab tests demonstrate that Caesarstone Sdot-Yam Ltd's samples contained less quartz than advertised, that Caesarstone Sdot-Yam Ltd’s reported consolidated margins, gross margins, and EBITDA were overstated, that the extent of and risk posed by a growing number of lawsuits for approximately 60 silicosis-related injuries or deaths suffered by workers and fabricators of its product in Israel was understated, that the impact recent OSHA warnings regarding silicosis would have on the opening of a new U.S. facility and associated costs, that recent inspection reports revealed audit deficiencies related to revenue and inventory controls, and that as a result of the foregoing, Defendants' statements about Caesarstone Sdot-Yam Ltd's business, operations, and prospects were allegedly false and misleading and/or lacked a reasonable basis at all relevant times.

Caesarstone Sdot-Yam Ltd reported that its annual Total Revenue rose from $259.67 million in 2011 to $447.40 million in 2014 and that its respective Net Income increased from $29.05 million to $78.44 million.

Shares of Caesarstone Sdot-Yam Ltd (NASDAQ: CSTE) grew from $45.98 per share in October 2014 to as high as $71.74 per share in late July 2015.

Then on August 19, 2015, an analyst firm published a report on Caesarstone Sdot-Yam Ltd asserting, among other things, that Freedom of Information Act request to the SEC revealed that the cost of quartz rose substantially by ~20% in 2014, yet Caesarstone Sdot-Yam Ltd told investors in its SEC filings the impact was just 4%, that independent lab tests show Caesarstone Sdot-Yam Ltd’s samples may contain less quartz than advertised, that Caesarstone Sdot-Yam Ltd’s reported consolidated margins may be overstated, and that proprietary U.S. import shipping data collected from port documents indicates that Caesarstone Sdot-Yam Ltd’s North American market share may not be growing as claimed.

Shares of Caesarstone Sdot-Yam Ltd (NASDAQ: CSTE) dropped from over $71 per share in late July to as low as $39.77 per share on August 19, 2015.