SAN FRANCISCO (Legal Newsline) — A tech company is facing a class action from shareholders because of its business relationship with a Chinese company that was on a U.S. national security watch list.
UA Local 38 Defined Contribution Pension Plan, on behalf of itself and all others similarly situated, filed a complaint July 10 in the U.S. District Court for the Northern District of California against Seagate Technology Holdings PLC, William D. Mosely and Gianluca Romano alleging violations of federal securities laws.
The plaintiffs, according to their complaint, purchased Seagate common stock between Sept. 15, 2020, and Oct. 25, 2022. They claim Seagate, a global data storage products supplier, reported $10.7 billion in revenue for the fiscal year 2021, and a net profit of $1.3 billion.
The plaintiffs further claim that during the class period, Huawei Technologies, a Chinese multinational tech corporation, became a "significant global purchaser" of Seagate's data storage products and that in 2019, Huawei was added to the U.S. Department of Commerce Bureau of Industry and Security's (BIS) Export Administration Entity List due to national security interests.
They claim Seagate continued to do business with Huawei and failed to disclose to investors its acceleration in sales to Huawei after competitors stopped selling to Huawei. They also claim Seagate was "in blatant violation" of the BIS Export Rules, which exposed the company to hundreds of millions of dollars in fines and penalties.
The plaintiffs seek monetary relief, interest, trial by jury and all other just relief. They are represented by Shawn Williams of Robbins Geller Rudman & Dowd LLP in San Francisco and Danielle Myers and Spencer Burkholz of Robbins Geller Rudman & Dowd LLP in San Diego.
U.S. District Court for the Northern District of California case number 3:23-CV-03431-SI