Nam Tai Electronics Sued by Shareholder

By on May 20, 2013

A shareholder class action lawsuit was filed against Nam Tai Electronics Inc. (Nam Tai) (NYSE: NTE) and certain of its officers alleging the China-based company misled investors and violated federal securities laws    The action was filed in the Southern District of New York on behalf of shareholders who purchased Nam Tai common stock between August 6, 2012 and April 26, 2013.

Specifically, the complaint alleges Nam Tai made false and misleading statements regarding the threat of intense competition which led the company to lower its unit sales prices.  Additionally, the company did not anticipate that a cancellation of orders by its primary customers would result in financial shortfalls, the complaint said.

On April 29, Nam Tai revealed that orders for its liquid crystal display (LCD) modules were much lower than initially expected and as a result it was forced to lower prices to meet customers’ demands.  Morever, the company said it was contemplating a halt in production of its highest quality LCM operations service in its Shenzhen and Wuxi manufacturing factories by the end of June 2013 in order to reduce further losses and save cash.

In reaction to the announcements, Nam Tai shares fell $3.58 per shares, or over 31.6%, to close at $7.75 per share on April 29, 2013.

If you purchased shares of Nam Tai between August 6, 2012 and April 26, 2013, you may file a motion with the court no later than July 16, 2013, and request that the court appoint you as lead plaintiff.  A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation.  To be appointed lead plaintiff, the court must decide that your claim is typical of the claims of other class members and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by your decision of whether or not to serve as a lead plaintiff.  You can recover as an absent class member without moving for lead plaintiff.  The action discussed here was not filed by Milberg.

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