Insider Selling/Undisclosed Related Party Transactions
Products or Services
This is a secvurities fraud class action lawsuit against Ionatron and its founders alleging violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
Ionatron allegedly violated federal securities laws by issuing a series of materially false statements regarding the battle field-readiness of its weapons. Specifically, on June 27, 2005, Ionatron heralded the development of a field-deployable vehicle incorporating its counter-Improvised Explosive Device ("IED") technology, also known as the Joint IED Neutralizer ("JIN"). Ionatron announced that it planned to sell this counter-IED vehicle to the U.S. Government.
Despite Ionatron's claim that the vehicle would be field-deployable, the class action complaint alleges that Ionatron actually concealed that the vehicle was at best an improvisation, incapable of meeting U.S. Government specifications for field-readiness. Meanwhile, Ionatron insiders sold over 1.5 million shares of their Ionatron stock for proceeds of $18.4 million.
The complaint further alleges that on or around May 10, 2006, Ionatron finally revealed to investors that the JIN vehicle actually was not "deployment-ready" in that the U.S. Government determined that the vehicle lacked the ruggedness and capabilities necessary for field deployment. On this news, the price of Ionatron stock plummeted, losing 12.3%, to close on May 11, 2006, at $11.25.
Name (Stock Symbol)
Ionatron, Inc. was acquired by Applied Energetics, Inc., s defense contractor.
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