BOSTON, Aug. 18, 2004 (PRIMEZONE) -- An investor has sued KVH Industries, Inc. ("KVH" or the "Company") (Nasdaq:KVHI), claiming the company and two top officers misled the investing public by overstating the purported success and market demand for one of its products.
Berman DeValerio Pease Tabacco Burt & Pucillo (www.bermanesq.com) filed the class action on August 17, 2004 in the U.S. District Court for the District of Rhode Island. The lawsuit seeks damages for violations of federal securities laws on behalf of all investors who bought KVH common stock from October 1, 2003 through and including July 2, 2004 (the "Class Period").
To receive a copy of the complaint, you may contact the court, call the firm at (800) 516-9926 or go to http://www.bermanesq.com/pdf/KVHIndustries-Cplt.pdf.
The lawsuit claims that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder, including U.S. Securities and Exchange Commission ("SEC") Rule 10b-5.
The complaint names as defendants: KVH; Martin A. Kits van Heyningen, who at all relevant times served as the company's president, chief executive officer and as a director; and Patrick J. Spratt, who at all relevant times served as the chief financial officer.
The complaint alleges that, throughout the Class Period, KVH, which makes mobile satellite communications products, touted the purported success and strong market demand for the TracVision A5 Antenna. KVH announced that the TracVision A5 would drive the Company's future growth and profitability. All along, however, there was little or no retail demand for the TracVision A5, the lawsuit claims.
On July 6, 2004, before the markets opened, KVH stunned the investing public by announcing that it was slashing the retail price of the TracVision A5 from $3495 to $2295 - or 34% - and establishing a huge $2.5 million "inventory valuation" reserve based on vendor purchase commitments and on-hand inventory to reflect the true value of the TracVision A5. Analysts noted that the dramatic decrease in the retail price would result in lower margins, which would ultimately preclude profitability.
As a result of these revelations, KVH's stock price plummeted approximately 19% from a closing price of $12.50 on July 2, 2004 to close at $10.15 on July 6, 2004.
The complaint says that the Company overstated the purported demand for the TracVision A5 and artificially inflated the value of KVH common stock in order to successfully complete a secondary offering in February 2004 of 2.7 million shares of its stock for proceeds of approximately $51.5 million.
If you purchased KVH common stock from October 1, 2003 through and including July 2, 2004, you may wish to contact the following attorneys at Berman DeValerio Pease Tabacco Burt & Pucillo to discuss your rights and interests.
N. Nancy Ghabai, Esq. Michael T. Matraia, Esq. One Liberty Square Boston, MA 02109 (800) 516-9926 law@bermanesq.com
If you wish to apply to be lead plaintiff in this action, a motion on your behalf must be filed with the court no later than September 20, 2004. You may contact the attorneys at Berman DeValerio to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action, or you may submit information online at http://www.bermanesq.com/Securities/Signup1.asp?caseid=518. Please note, you may also retain counsel of your choice and need not take any action at this time to be a class member.
Berman DeValerio Pease Tabacco Burt & Pucillo prosecutes class actions nationwide on behalf of institutions and individuals, chiefly victims of securities fraud, antitrust law violations, and consumer fraud. The firm consists of 32 attorneys in Boston, San Francisco and West Palm Beach, Florida.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca