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Two lawsuits filed on Remec stock plunge
By: BRADLEY J. FIKES - Staff Writer | ∞
Two class-action lawsuits were announced Tuesday against Remec Inc., a Del Mar electronics maker. The suits were filed in the U.S. District Court for the Southern District of California by Schatz & Nobel, P.C. of Hartford, Conn., and Milberg Weiss Bershad & Schulman LLP of New York City.
They allege that Remec management concealed negative information about the company's financial condition. After the information was revealed on Sept. 8 and 9, Remec stock plunged from about $12 to $4.21 per share.
Remec stock closed Tuesday at $4.62, down 6 cents for the day. A call to a Remec spokeswoman was relayed to the company's legal department, but was not answered.
Remec's first announcement earlier this month was that it would take a "goodwill impairment" charge of $62.4 million, contributing to a net loss of $76.5 million for the quarter ended June 30. The company said the charge came from losses in its wireless division, reflecting poor business conditions in that market.
The next day, Remec filed a 10-Q statement with the Securities and Exchange Commission stating that it had identified potential "control deficiencies" in its system of internal controls for complying with the Sarbanes-Oxley Act, which mandates standards of accounting.
In its filing, Remec said that determining the extent of these deficiencies, if they do exist, is a "top priority."
Contact staff writer Bradley J. Fikes at (760) 739-6641 or bfikes@nctimes.com.
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