A class action lawsuit has been filed in the United States District Court for the Eastern District of Wisconsin on behalf of a class consisting of all persons or entities who purchased the securities of Koss Corporation (Nasdaq: KOSS) between July 12, 2005 and December 21, 2009, inclusive (the “Class Period”). The Complaint charges Koss and certain of the Company’s current and former executive officers with violations of federal securities laws. Koss designs, manufactures and markets high-fidelity stereophones, computer headsets, speaker-phones, telecommunications headsets, active noise canceling stereophones, wireless stereophones and compact disc recordings of American Symphony Orchestras on the Koss Classics label. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Koss’s financial performance were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that certain Company employees had devised and carried out a scheme to defraud investors and divert Company funds potentially exceeding $31 million; (2) that the Company’s financial statements and corporate bank account balances had been manipulated to conceal the diversion of corporate funds; (3) that, as a result, the Company’s financial results were overstated during the Class Period; (4) that the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (5) that the Company lacked adequate internal and financial controls; and (6), as a result of the above, that the Company’s financial statements were materially false and misleading at all relevant times.
On December 21, 2009, Koss shocked investors when it announced that NASDAQ halted trading of Koss stock at the Company’s request after it discovered certain unauthorized transactions at the Company, and the Board of Directors had appointed a special committee of independent directors to lead an internal investigation to determine the effect of the transactions on Koss’s financial statements.
On December 24, 2009, the Company announced that its Principal Accounting Officer had been terminated and two members of its accounting staff who served under her had been placed on unpaid administrative leave. Thereafter, the Company announced that its internal investigation had been expanded to include the fiscal year 2005 and preliminary estimated that the amount of the transactions had exceeded $31 million. Koss further announced that it had dismissed Grant Thorton LLP as its independent auditors, and its previously issued financial statements for the fiscal years ended June 30, 2005 through 2009 and the three months ended September 30, 2009, should no longer be relied upon due to the unauthorized financial transactions.
On January 11, 2009, when trading in Koss stock resumed, shares of the Company’s stock declined $1.32 per share, approximately 24%, to close on January 11, 2010, at $4.19 per share, on unusually heavy volume
If you are a current shareholder and purchased during period between July 12, 2005 and December 21, 2009 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.