MagnaChip Semiconductor Corporation
ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS
ACTION SUIT AGAINST MAGNACHIP SEMICONDUCTOR CORPORATION
April 21, 2015 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/magnachip/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Northern District of California on behalf of purchasers of MagnaChip Semiconductor Corporation (“MagnaChip”) (NYSE:MX) publicly traded securities during the period between February 1, 2012 and February 12, 2015 (the “Class Period”), including purchasers of MagnaChip common stock pursuant and/or traceable to MagnaChip’s February 6, 2013 follow-on public stock offering.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/magnachip/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges MagnaChip and certain of its officers and directors with violations of the Securities Exchange Act of 1934. MagnaChip is a South Korea-based designer and manufacturer of analog and mixed-signal semiconductor products mainly for high-volume consumer, computer and communication applications, which includes smart phones.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business, prospects, operations and financial results, and failed to disclose the inadequacy of its internal controls and procedures over financial reporting. Specifically, the Company failed to disclose that it was improperly recognizing revenues, resulting in its prior financial statements overstating its revenues and earnings in 2011, 2012, and the first nine months of 2013. As a result of defendants’ false statements, MagnaChip securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $23.57 per share on October 21, 2013, and MagnaChip’s controlling shareholder, Avenue Capital Management II, L.P., was able to sell more than 16.1 million MagnaChip shares in secondary stock offerings and on the open market during the Class Period at fraud-inflated prices, receiving $232.675 million in gross proceeds.
Following a January 2014 disclosure that it could not timely file its annual financial report for fiscal 2013, on March 11, 2014, MagnaChip announced that it would be restating its 2011, 2012 and 2013 financial results after concluding that it had “incorrectly recognized revenue on certain transactions,” stating it “expect[ed] that the primary impact of the correction of prior revenue recognition errors [would] be to recognize revenue on certain transactions in the periods in which the distributor ship[ped] the products to the end customer rather than the periods in which the products [were] shipped to distributors.” Then on February 12, 2015, after the market closed, MagnaChip filed its Annual Report on Form 10-K with the SEC for the fiscal year ended December 31, 2013, restating its financial results for fiscal years 2011, 2012, and the first three quarters of 2013, resulting in a total reversal of earnings by $142 million, wiping out 55% of its reported profits for those periods. The complaint alleges that as a result of this news, MagnaChip’s shares plummeted $7.50 per share to close at $7.52 per share on February 13, 2015, a one-day decline of nearly 50%.
Plaintiff seeks to recover damages on behalf of all purchasers of MagnaChip publicly traded securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, with 200 lawyers in ten offices, represents U.S. and international institutional investors in contingency-based securities and corporate litigation. The firm has obtained many of the largest securities class action recoveries in history, including the largest securities class action judgment. Please visit http://www.rgrdlaw.com for more information.