Force Protection may have failed to inform investors of problems in delivering vehicles to the Defense Department and the Defense Department's questioning of Force Protection's internal auditing and accounting procedures.

This is a securities fraud class action lawsuit against Force Protection and certain of its officers and directors

Force Protection and its subsidiaries engage in the manufacture of ballistic and blast protected vehicles.

The securities class action complaint alleges Force Protection issued materially false and misleading statements regarding Force Protection's business, financial results and prospects. Specifically, Force Protection continually boasted Force Protection's dominance in the Mine Resistant Ambush Protected ("MRAP") market was due to its superior product design and rapid delivery rates. However, in a report dated June 27, 2007, the Inspector General of the Department of Defense questioned both of these claims and criticized the awarding of contracts to Force Protection on a sole source basis and without competitive bidding. Then, on February 29, 2008, after the market closed, Force Protection announced it would have to delay the release of its 2007 Form 10-K and restate its Form 10-Q for the period ended September 30, 2007.

On this news, Force Protection's stock collapsed to close at $3.58 per share on March 3, 2008, a one-day decline of 13% and an 88% decline from the Class Period high of $30.27 per share, prior to when Force Protection's problems began to be revealed.

According to the class action complaint, the true facts, which were known by Force Protection but concealed from the investing public during the Class Period, were as follows:

(a) as a result of the Force Protection's ongoing problems in meeting contractual delivery deadlines, Force Protection would have trouble competing in the MRAP market;

(b) in audit reports, the Defense Contract Audit Agency had been critical of Force Protection's finances and financial accounting system, which threatened Force Protection's eligibility to compete for government contracts;

(c) Force Protection's accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions;

(d) contrary to the representations contained in Force Protection's SEC filings, Force Protection's internal controls were inadequate and easily manipulated;

(e) Force Protection lacked effective internal controls in its financial reporting process, required to enable it to properly analyze and/or estimate Force Protection's future financial and operational performance; and

(f) Force Protection falsely report at least its third quarter 2007 financial results.