NEW YORK, April 4, 2008 (PRIME NEWSWIRE) -- Nationwide class-action law firm Scott+ Scott LLP (www.scott-scott.com) announced today that Arizona Federal Judge Cindy K. Jorgenson has denied a bid by securities-fraud defendant Ionatron Inc. (now Applied Energetics Inc.) (Nasdaq:AERG) to have a class action lawsuit against the company and certain other insider defendants dismissed.
The lawsuit centers on investor claims that Ionatron knowingly deceived investors by concealing the fact that its newly-developed and highly-touted counter-improvised explosive device vehicle was essentially a mock-up, incapable of meeting U.S. Government specifications for successful field testing. The lawsuit further claims that these misrepresentations enabled company insiders to reap enormous personal gains on the sale of their Ionatron stock at artificially inflated prices.
On May 10, 2006, Ionatron shocked investors when it announced that the U.S. Government, after testing the then-current vehicle platform, concluded that the vehicle was unfit for field use. The company also disclosed that it had selected the platforms for the vehicles due solely to their off-the-shelf availability. On this news, the price of Ionatron shares plunged more than 39.5% over the four subsequent trading days, falling from $12.83 per share on May 10, 2006, to close at $7.76 per share on May 16, 2006, for a combined loss of $5.07 per share, on combined volume of 9.4 million shares. The lawsuit alleges that the Company concealed material setbacks in the development of the counter-improvised explosive device vehicle while doing little more than improvising "off-the-shelf" vehicle platforms and components to hastily "develop" a "deployment-ready" prototype vehicle.
The suit seeks class-action status for those investors who bought Ionatron stock between June 27, 2005 and through May 10, 2006. Ionatron filed its motion to dismiss the case on February 23, 2007. The parties presented oral argument on December 10, 2007.
Scott+Scott LLP is a law firm with significant experience in prosecuting investor class actions. The firm currently is leading counsel litigating major securities, antitrust and employee retirement plan actions throughout the United States, including, among others, actions against Lehman Brothers Holdings Inc. (NYSE:LEH), General Motors Corporation (NYSE:GM), Home Solutions of America Inc. (Pink Sheets:HSOA), FX Energy Inc. (Nasdaq:FXEN) and Diebold Inc. (NYSE:DBD). The firm represents pension funds, foundations, individuals and other entities worldwide.
More information on this and other class actions can be found on the Class Action Newsline at http://www.primenewswire.com/ca/