COLCHESTER, Conn., July 14, 2006 (PRIMEZONE) -- On July 14, 2006, Scott+Scott, LLC, filed a class action against Infosonics Corp. ("Infosonics" or the "Company") (AMEX:IFO) and certain officers and directors in the U.S. District Court for the Southern District of California. The action is on behalf of Infosonics securities purchasers during the period May 8, 2006, through June 12, 2006, inclusive (the "Class Period"), for violation of the Securities Exchange Act of 1934. The complaint alleges that defendants made false and misleading statements and material omissions regarding the Company's financial statements. As a result, the price of the Company's securities was inflated during the Class Period, thereby harming investors.
If you purchased Infosonics securities during the Class Period and wish to serve as a lead plaintiff in the action, you must move the Court no later than August 14, 2006. Any potential class member may move the Court to serve as lead plaintiff through counsel of its choice, or may choose to do nothing and remain an absent class member. If you wish to discuss this action or have questions concerning this notice or your rights, please contact Scott+Scott (scottlaw@scott-scott.com, 800/404-7770, 860/537-5537) or visit the Scott+Scott website, www.scott-scott.com, for more information. There is no cost or fee to you.
The complaint alleges that defendants embarked on a fraudulent course of conduct, in violation of Generally Accepted Accounting Principles ("GAAP"), to improperly "mark to market" warrants issued in conjunction with Company financing efforts completed in January 2006. After being "marked to market," the warrants remained booked as a liability at the end of the quarter ended March 31, 2006, when they should have been reclassified as equity as of February 17, 2006, the date upon which the U.S. Securities and Exchange Commission ("SEC") declared the Company's Form S-3 effective, thereby registering the shares underlying the warrants. The immediate result was to artificially inflate the Company's net income results for the quarterly period ended March 31, 2006, a condition that remained uncorrected until the end of the Class Period. Finally, on June 12, 2006, the Company revealed that it had restated certain portions of the financial statements for the quarter ended March 31, 2006. On this news, the price of Infosonics' stock fell from $24.22 to $17.05, a drop of $7.17, on more than three times the normal trading volume.
The plaintiff is represented by Scott+Scott, a firm with significant experience in prosecuting investor class actions. The firm dedicates itself to client communication and satisfaction and currently is litigating major securities, antitrust and employee retirement plan actions throughout the United States. The firm represents pension funds, charities, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at www.primezone.com/ca.