NEW YORK, Apr. 24, 2015 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of all persons or entities that purchased the securities of MagnaChip Semiconductor Corporation (“MagnaChip” or the “Company”) (NYSE: MX ) during the period from February 1, 2012 through February 12, 2015 (the “Class Period”), including purchases of MagnaChip common stock pursuant and/or traceable to the Company’s February 6, 2013 follow-on public offering.
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 about the Company's operations and financial results, and failed to reveal that its internal controls and procedures governing financial reporting were not adequate. The Complaint further alleges that the Company failed to reveal that it was improperly recognizing revenues, and as a result its prior financial statements overstated its revenues and earnings for the years 2011, 2012, and the first nine months of 2013. The Complaint also alleges that 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 that MagnaChip’s controlling shareholder, Avenue Capital Management II, L.P., sold 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.
After 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.” However, 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 $142 million change in earnings, wiping out approximately 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%.
If you wish to serve as lead plaintiff, you must move the Court no later than June 22, 2015 . A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com .
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