This is a securities fraud class action lawsuit against Camtek Ltd. and certain of its directors and officers.
The securities class action claims that Camtek material omissions and dissemination of materially false and misleading statements concerning Camtek's business and prospects which caused the Camtek's stock price to become artificially inflated, inflicting damages on investors.
Camtek engages in the design, development, manufacture and marketing of automated optical inspection systems and related products which are utilized in the printed circuit board ("PCB") and semiconductor industries to optically inspect various types of electronic product components for manufacturing defects.
The class action complaint alleges that during the Class Period, Camtek artificially inflated the price of Camtek shares by issuing statements touting positive trends in the PCB and semiconductors markets and the strength of Camtek's business and financial performance, but that defendants:
(i) knew or recklessly disregarded and failed to disclose to the investing public that Camtek lacked requisite internal controls, and
(ii) misrepresented Camtek's business and future prospects.
Thus, Camtek had no reasonable basis to make projections about its financial results, and as a result, defendants' Class Period statements concerning Camtek's business and future prospects were, at minimum, reckless. The Complaint further alleges that defendants were further motivated to engage in this course of conduct in order to generate proceeds from a private placement with institutional investors in April 2006 whereby Camtek garnered approximately $15 million in proceeds.
On December 21, 2006, Camtek issued a press release announcing Camtek's preliminary financial results for fourth quarter 2006. Camtek announced that fourth quarter revenue and earnings were expected to be lower than anticipated "due to lower revenues in the semiconductor segment." This news shocked the market, causing shares of Camtek to plummet $1.28 per share -- a more than 22% drop from the previous day's closing price of $5.77 per share -- to close on December 21, 2006, at $4.49 per share on unusually heavy volume of more than 1.4 million shares traded.
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