A group of SanDisk investors has asked a California federal judge to approve a $50 million settlement to resolve class action claims that the digital storage maker falsely pumped up its production and sales forecasts, leading its stock to lose nearly one-fifth of its value when the truth came out.
After more than three years of litigation and several months of mediation, SanDisk Corp. reached the proposed cash deal with a group of investors in exchange for releasing their claims that the memory card manufacturer duped them over company share prices, according to the motion filed Monday.
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The suit points to SanDisk’s March 2015 announcement that it would miss its revenue projections of $1.4 billion for the first quarter by about $100 million due to production qualification delays and lower than expected sales figures and that it forecast its 2015 revenue estimates to be negatively affected. Shares of SanDisk fell more than 18% after the announcement, closing at $66.20, down $14.98 per share.
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The lead plaintiffs and class are represented by Deborah Clark-Weintraub, Max R. Schwartz and John T. Jasnoch of Scott & Scott Attorneys at Law LLP, Jonathan Gardner, Carol C. Villegas and Ross M. Kamhi of Labaton Sucharow LLP and Steven J. Toll and Christopher Lometti of Cohen Milstein Sellers & Toll PLLC.
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