OSI Systems, Inc. (NASDAQ:OSIS)
A class action lawsuit was filed in United States District Court, Central District of California, on behalf OSI Systems (“OSI Systems” or “OSI”) securities investors, asserting claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Investors who purchased or otherwise acquired OSI Systems securities between August 21, 2013 and December 6, 2017, inclusive (the “Class Period”), are encouraged to contact Kehoe Law Firm, P.C. to discuss their potential legal rights.
The class action complaint alleges that throughout the Class Period, OSI Systems Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about OSI Systems’ business, operations, and prospects.
Specifically, OSI Systems Defendants allegedly failed to disclose that: (1) OSI Systems acquired the Albania concession through bribery or other illicit means; (2) OSI transferred 49% of its project company associated with the Albania concession, S2 Albania SHPK, an entity purportedly worth millions, for consideration of less than $5.00; (3) OSI engaged in other illegal acts, including improper sales and cash payments to government officials; (4) these practices caused OSI Systems to be vulnerable to potential civil and criminal liability, and adverse regulatory action; and (5) as a result, OSI Systems Defendants’ statements about OSI’s business, operations, and prospects, were materially false and/or misleading and/or lacked a reasonable basis.
On December 6, 2017, Muddy Waters Research published a report on OSI entitled “OSIS: Rotten to the Core.” In the report, Muddy Waters Research alleges that there was corruption in the 2013 award of OSI’s Albania concession. Muddy Waters Research claims that while the concession “has an estimated top line lifetime value of $150 million to $250 million,” OSI “likely bribed somebody by giving half of it away for $4.50.” Further, Muddy Waters Research reported that “[t]here was an unannounced transfer of 49% of OSIS’s project company, S2 Albania SHPK, to a holding company owned by an Albanian doctor, for consideration of less than $5.00.”
Additionally, Muddy Waters Research reported that “[t]o be clear, this company (S2 Albania SHPK) is the company to which all rights and obligations under the turnkey contract award belong, so 49% of the company is presumably worth many millions of dollars. It appears to [Muddy Waters Research] that [OSI’s] accounts do not reflect the transfer – there are no deductions for non-controlling interests in the income statement, and February 2017 bond offering documents appear to show the subsidiary as 100% owned by [OSI].”
Muddy Waters Research also reported that “[b]eyond the turnkey contracts, investigators’ interviews with former employees yielded numerous anecdotes indicating [OSI] is rotten to the core. Former employees alleged a list of rot they experienced at Rapiscan, including their concern about possibly going to prison, knowledge of improper sales, cash payments to government officials, fraud in a significant contract, and that [OSI] had narrowly avoided being debarred from doing business with the U.S. government.”
On this news, OSI’s stock price fell $24.55 per share, or 29.2%, to close at $59.52 per share on December 6, 2017, on unusually heavy trading volume.
Have You Purchased or Acquired OSI Systems Shares?
If you purchased or otherwise acquired OSI Systems shares and would like to speak privately with a securities attorney to learn whether you may have legal claims, please complete the form to the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
About Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.