Harman Kardon 2008 Annual Report Download - page 91

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73
District Court for the District of Columbia seeking compensatory damages and costs on behalf of all
persons who purchased the Company’s common stock between April 26, 2007 and September 24,
2007. The allegations in the Boca complaint are essentially identical to the allegations in the original
Kim complaint, and like the original Kim complaint, the Boca complaint alleges claims for violations of
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
On January 16, 2008, the Kim Plaintiff filed an amended complaint. The amended complaint, which
extended the Class Period through January 11, 2008, contended that, in addition to the violations alleged
in the original complaint, the Company also violated Sections 10(b) and 20(a) and Rule 10b-5
by knowingly failing to disclose “significant problems” relating to its personal navigation device (“PND”)
“sales forecasts, production, pricing, and inventory” prior to January 14, 2008. The amended complaint
claimed that when “Defendants revealed for the first time on January 14, 2008 that shifts in PND sales
would adversely impact earnings per share by more than $1.00 per share in fiscal 2008,” that led to a
further decline in the Company’s share value and additional losses to the plaintiff class.
On February 15, 2008, the Court ordered the consolidation of the Kim action with the Boca action, the
administrative closing of Boca, and designated the short caption of the consolidated action as In re
Harman International Industries Inc. Securities Litigation, civil action no. 1:07-cv-01757 (RWR). That
same day, the Court appointed Arkansas Public Retirement System as Lead Plaintiff and approved the
law firm Cohen, Milstein, Hausfeld and Toll, P.L.L.C. to serve as Lead Counsel.
On March 24, 2008, the Court ordered, for pretrial management purposes only, the consolidation of
Patrick Russell v. Harman International Industries, Incorporated, et al. with In re Harman International
Industries Inc. Securities Litigation .
On May 2, 2008, Lead Plaintiff filed a Consolidated Class Action Complaint (the “Consolidated
Complaint”). The Consolidated Complaint, which extends the Class Period through February 5, 2008,
contends that the Company and certain of its officers and directors violated Sections 10(b) and 20(a) and
Rule 10b-5 by issuing false and misleading disclosures regarding the Company’s financial condition in
fiscal 2007 and fiscal 2008. In particular, the Consolidated Complaint alleges that defendants knowingly
or recklessly failed to disclose material adverse facts about MyGIG radios, PNDs and the Company’s
capital expenditures. The Consolidated Complaint alleges that when the Company’s true financial
condition became known to the market, the price of the Company’s stock declined significantly, causing
losses to the plaintiff class.
On July 3, 2008, defendants moved to dismiss the Consolidated Complaint in its entirety.
We believe the lawsuit, which is still in its earliest stages, is without merit and we intend to vigorously
defend against it.
Patrick Russell v. Harman International Industries, Incorporated, et al.
Patrick Russell (the “Russell Plaintiff”) filed a complaint on December 7, 2007 in the United States
District Court for the District of Columbia and an amended purported putative class action complaint on
June 2, 2008 against the Company and certain of its officers and directors alleging violations of the
Employee Retirement Income Security Act (“ERISA”) and seeking, on behalf of all participants in and