Force Protection Inc (NASDAQ: FRPT) Investor Securities Class Action Lawsuit 03/10/2008

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Company Name(s): 
Force Protection
Case Name: 
Force Protection Shareholder Class Action Lawsuit 03/10/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: FRPT
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/10/2008
Class Period Begin: 
01/18/2007
Class Period End: 
03/14/2008
Court of Filing: 
U.S. District Court for the District of South Carolina
Deadline To File for Lead: 
05/09/2008
Date Settled: 
03/09/2011
Settlement Amount: 
$24,000,000
Deadline to Participate in Settlement: 
03/11/2011
Summary: 

March 9, 2011 - The court ordered final judgement, approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys' fees and expenses and dismissed the action with prejudice.

January 25, 2011 - The court held a final settlement hearing.

October 5, 2010 - The court preliminarily approved the settlement.

September 27, 2010 - Parties filed a stipulation of settlement.

January 16, 2009 - Defendants filed a motion to dismiss.

November 6, 2008 - The lead plaintiffs filed an amended consolidated complaint on behalf of investors who purchased NASDAQ: FRPT common shares between January 18, 2007 and March 14, 2008. The lead plaintiff alleges that the defendants violated the Securities Act of 1934 by issuing false and misleading statements between January 18, 2007 and March 14, 2008.

June 20, 2008 - The lead plaintiffs and lead counsel were appointed.

June 10, 2008 - All cases were consolidated.

May 9, 2008 - Lead plaintiff motions were filed.

April 3, 2008 - More investors filed complaints in the U.S. District Court for the District of South Carolina on behalf of investors who purchased Force Protection Inc (formely NASDAQ: FRPT) common shares between August 14, 2006 and March 17, 2008.

March 20, 2008 - Other investors filed complaints in the U.S. District Court for the District of South Carolina on behalf of investors who purchased Force Protection Inc (formely NASDAQ: FRPT) common shares between August 14, 2006 and February 29, 2008.

March 19, 2008 - Another investor filed a complaint in the U.S. District Court for the District of South Carolina on behalf of investors who purchased Force Protection Inc (formerly NASDAQ: FRPT) common shares between July 13, 2006 and February 29, 2008.

March 10, 2008 - An investor in shares of Force Protection Inc (formerly NASDAQ: FRPT) filed a lawsuit in the U.S. District Court for the District of South Carolina against Force Protection Inc over alleged violations of Federal Securities Laws.

According to the complaint the plaintiff charges Force Protection Inc and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

The complaint alleges that between August 14, 2006 and February 29, 2008, defendants issued materially false and misleading statements regarding Force Protection Inc’s business and financial results. Specifically, defendants continually boasted Force Protection Inc's dominance in the Mine Resistant Ambush Protected (MRAP) market was due to its superior product design and rapid delivery rates. However, in a report dated June 27, 2007, the Inspector General of the Department of Defense questioned both of these claims and criticized the awarding of contracts to Force Protection Inc on a sole source basis and without competitive bidding. Then, on February 29, 2008, after the market closed, Force Protection Inc announced it would have to delay the release of its 2007 Form 10-K and restate its Form 10-Q for the period ended September 30, 2007. On this news, Force Protection Inc's (formerly NASDAQ: FRPT) stock collapsed to close at $3.58 per share on March 3, 2008, a one-day decline of 13% and an 88% decline from the high of $30.27 per share between the dates of August 14, 2006 and February 29, 2008, prior to when Force Protection Inc's problems began to be revealed.

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the August 14, 2006 and February 29, 2008, were as follows: (a) as a result of Force Protection Inc’s ongoing problems in meeting contractual delivery deadlines, Force Protection Inc would have trouble competing in the MRAP market; (b) in audit reports, the Defense Contract Audit Agency had been critical of Force Protection Inc's finances and financial accounting system, which threatened Force Protection Inc’s eligibility to compete for government contracts; (c) Force Protection Inc’s accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions; (d) contrary to the representations contained in Force Protection Inc’s SEC filings, the Force Protection Inc’s internal controls were inadequate and easily manipulated; (e) Force Protection Inc lacked effective internal controls in its financial reporting process, required to enable it to properly analyze and/or estimate Force Protection Inc’s future financial and operational performance; and (f) defendants had caused Force Protection Inc to falsely report at least its third quarter 2007 financial results.

Force Protection Inc and its subsidiaries engage in the manufacturing of ballistic and blast protected vehicles.