Orion Energy Systems Agrees to Settlement In Shareholder Class Action
January 2011 - If you purchased Orion common stock pursuant and/or traceable to Orion's initial public offering on or about December 18, 2007, through February 7, 2008, inclusive, your rights may be affected by the Litigation and the settlement thereof. A hearing will be held on April 14, 2011, at 10:00 a.m., in the Southern District of New York, for the purpose of determining (1) whether the proposed settlement of the Litigation for the sum of $3,250,000 in cash should be approved by the Court as fair, reasonable, and adequate; (2) whether, thereafter, this Litigation should be dismissed with prejudice against the Defendants as set forth in the Settlement Agreement dated September 16, 2010; (3) whether the Plan of Allocation of settlement proceeds is fair, reasonable, and adequate and therefore should be approved; and (4) the reasonableness of the application of Lead Counsel for the payment of attorneys' fees and expenses incurred in connection with this Litigation, together with interest thereon.
February 2008 - According to a press release dated February 11, 2008 with respect to the IPO, Orion realized over $78 million in proceeds, while its Chief Executive Officer and family sold 600,000 shares for proceeds of approximately $7 million. On February 6, 2008, just weeks after its IPO, Orion revealed news concerning the Company which completely surprised analysts and investors, and caused the stock to drop approximately 43%, to a price of $8.51 per share.
Orion is a manufacturer of efficient lighting and energy systems to businesses. The Prospectus for its IPO described a Company that was quickly growing revenues from existing product lines, and briefly described product line extensions. After the close of trading on February 6, 2008, Orion revealed that revenues in its current fiscal quarter would decline as the Company took aggressive measures to promote a “new business model,” a change in focus that is alleged not to have been adequately disclosed or described in the IPO Prospectus. During the February 6, 2008 conference call, Orion executives, including the CEO, appeared unable to explain to the satisfaction of securities analysts this surprising news about the business model change on the heels of the IPO, or its impact on revenues.
The complaint charges Orion, certain of its officers and directors and the underwriters who sponsored the IPO with violation of the federal securities laws by issuing a Registration Statement and Prospectus in connection with the IPO which was materially false or misleading due to omissions. The law generally imposes strict liability on defendants responsible for a materially false Registration Statement and Prospectus, including for purchases made in the open market after the IPO; no fraud need be proved to recover.