Armored vehicle manufacturer Force Protection Inc. has agreed to a $24 million settlement in a securities class action brought on behalf of investors, including the Laborers’ Annuity and Benefit System of Chicago. Berman DeValerio acted as co-lead counsel in the case against the South Carolina-based company.
The settlement addresses the claims of shareholders who accused the company and its top officers of making false and misleading statements regarding financial results, failing to maintain effective internal controls over financial reporting and failing to comply with government contracting standards.
“We’re extremely pleased with the settlement, which we believe offers substantial benefits to the class of investors who were misled by the company,” said Jeffrey Block, the Berman DeValerio partner who oversaw the case. “Discovery for this case required an exhaustive analysis of more than 1 million pages of documents from the defendants, their consultants and the Department of Defense.”
According to the complaint, Force Protection’s internal accounting and government contracting controls were “in a shambles” throughout the class period. For example, the company publicly reported that it had earned $23.5 million for the first nine months of 2007 and that its internal accounting controls were effective. In fact, as the company later admitted, it had actually lost $616,000 during this period and its internal controls were significantly flawed, resulting in unreliable financial information.
The settlement covers those investors who purchased Force Protection common stock from Jan. 18, 2007, through and including March 14, 2008. The company, based on Ladson, South Carolina, designs and manufactures ballistic- and blast-protected specialty vehicles for domestic and foreign governments.
The Hon. C. Weston Houck of the U.S. District Court for the District of South Carolina signed an order granting preliminary approval of the settlement October 5, 2010. A final approval hearing has been scheduled for January 2011. For a copy of the order preliminary approving the settlement, click here.
In a related case, the company also agreed to settle a shareholder derivative action that requires the adoption of several corporate governance practices.
Neither the company nor any of its directors or officers admitted to any wrongdoing or liability.
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.