Cirrus Logic (CRUS) Securities Fraud Class Action Lawsuit
Cirrus Logic (CRUS) securities fraud class action summary
In less than two trading days (from October 31, 2012 through November 2, 2012), Cirrus Logic lost over $500 million in shareholder value. This equates to over 20% of the value of the entire company. Why? On October, 31st, Cirrus Logic issued a statement that its 2013 revenues would be significantly less than previously forecasted. This securities fraud class action investigation then centers around the public statements made by Cirrus Logic in the four months leading up to this horrible press release. Did management know that Cirrus Logic’s actual business could not live up to revenue forecasts and if so did CRUS management properly disclose the underlying business problems to CRUS shareholders in a proper and timely manner?
Cirrus Logic (CRUS) faces serious head winds in 2012
Allegation One: Apple Inc. is by far Cirrus Logic’s largest customer. Cirrus’s dependence on Apple for revenues was increasing rather than decreasing in 2012 making Cirrus a less diverse, Apple-dependent company. This heightened reliance on Apple was potentially a material fact for CRUS shareholders.
Allegation Two: Cirrus’s sales growth was decreasing rather than increasing and given the healthy increase in sales embedded in Cirrus’ 2013 revenue forecasts this basic fact should have been properly disclosed to CRUS shareholders.
Allegation Three: Cirrus was experiencing vendor problems and the cost of its raw materials was increasing. This would have a negative impact on gross margins and Cirrus Logic management should have properly and timely reported these problems to CRUS shareholders.
Allegation Four: Cirrus Logic had to delay the launch of several models of Cirrus’s new LED lighting. Again a fact that Cirrus Logic should have disclosed in a timely manner to existing and potential CRUS shareholders.
Cirrus Logic shareholders take it on the chin
Cirrus Logic (CRUS) securities fraud class action investigation
CRUS Shareholders: FREE LEGAL REVIEW!