A manufacturer of small chips for smartphones is being sued over allegations that it released inaccurate financial data that misled shareholders.
The Oklahoma Police Pension & Retirement System filed the lawsuit on April 21 against MagnaChip and its executives, alleging the company failed to disclose improper revenues and earnings overstatements in 2011, 2012 and the first three months of 2013.
The lawsuit also said MagnaChip restated the revenue results for those years, which resulted in a “reversal of earnings by $142 million, wiping out 55 percent of its reported profits for those periods.”
The South Korea-based manufacturer produces computer and communication applications for smartphones. One of its major clients is the cell-phone producer Samsung, the lawsuit said.
The lawsuit alleges that MagnaChip's stock price was artificially inflated as a result of the misleading information about revenues, reaching a high of $23.57 per share in October 2013.
The lawsuit seeks class status for those who owned MagnaChip stock between Feb. 1, 2012, and Feb. 12 of this year.
The plaintiffs are represented by Shawn A. Williams, Samuel H. Rudman and Mary K. Blasy of Robbins Geller Rudman & Dowd LLP in San Francisco, California.
United States District Court, Northern District of California, case number 3:15-cv-01797.