The law firm of Cauley Geller Bowman & Coates LLP announces a class action has been filed in the United States District Court for the Southern District of Florida on behalf of purchasers of Sensormatic Electronics Corp. securities during the period between Jan. 12 and April 9.
The complaint charges Sensormatic and certain officers and directors with violating the federal securities laws by issuing a series of materially false and misleading statements concerning its growing sales and new contracts with massive clients. These statements, as alleged in the complaint, were materially false and misleading because they failed to disclose that demand for Sensormatic’s products was sluggish throughout the class period, and the company was discounting its products to inflate sales.
On April 10, Sensormatic issued a press release announcing that its third quarter of 2001 revenue had declined from the third quarter of 1999, and that it would miss securities analysts’ earnings estimates by 66 percent. In response to this announcement, Sensormatic’s stock price dropped by 31 percent in one day to $13 per share.
Before the disclosure of Sensormatic’s business, certain Sensormatic insiders sold more than $5.5 million of their personally held Sensormatic stock.