SAN DIEGO, June 15 – LAWFUEL – Press Release Service – Hulett Harper Stewart LLP has filed
a class action complaint against InfoSonics Corporation (“InfoSonics”)
(Amex: IFO) in the U.S. District Court for the Southern District of
California on behalf of investors who purchased the publicly traded
securities of InfoSonics during the period from May 9, 2006 through and
including June 9, 2006 (the “Class Period”).
The complaint alleges that InfoSonics and its top officers engaged in a
scheme to defraud InfoSonics investors in violation of the federal
securities laws by reporting false financial results on May 8, 2006 for its
first quarter ended March 31, 2006. Specifically, the complaint alleges
that defendants knew, or with deliberate recklessness disregarded, that the
Company had improperly accounted for warrants issued in connection with a
January 2006 private placement which enabled it to report net income of
$1.738 million for that quarter. Before the market opened on Monday, June
12, 2006, InfoSonics shocked the market when it disclosed that it would
need to restate its previously reported net income for the first quarter
down to $1.173 million, a decrease of 32.5%, due to the improper accounting
treatment of the warrants. InfoSonics stock immediately plunged more than
28% that day on extraordinarily high volume.
The complaint further alleges that, while in possession of material
nonpublic information concerning InfoSonics accounting for the warrants,
defendants sold massive amounts of their personal holdings between May 11,
2006 and June 7, 2006 for proceeds exceeding $3 million. Indeed, as the
Company admitted in a Form 8-K filed on June 12, 2006 with the SEC,
InfoSonics had determined by Monday, June 5, 2006 that it would need to
restate its previously reported financial results because it had improperly
accounted for the warrants. Nevertheless, its Chief Financial Officer and
the President of the Company’s Latin American operations continued to sell
their personal InfoSonics stock even after that determination.
If you purchased InfoSonics publicly traded securities during the Class
Period (May 9, 2006 – June 9, 2006), you may, no later than August 14,
2006, move to be appointed as a Lead Plaintiff. A Lead Plaintiff is a
representative party that acts on behalf of other class members in
directing the litigation. If you have sustained losses on your purchases of
InfoSonics publicly traded securities during the Class Period, please
contact Hulett Harper Stewart LLP at office@hulettharper.com or call us at
619/338-1133 for a more thorough explanation of the Lead Plaintiff
selection process and the claims asserted against InfoSonics.
Hulett Harper Stewart LLP is located in San Diego, California where the
case is pending. The founding partners have over sixty years combined
experience representing plaintiffs and defendants in a wide variety of
complex litigation matters including securities, antitrust, and consumer
actions. Please visit our website for more information about the Firm.
