RM LAW, P.C. announces that a class action lawsuit has been filed on behalf of all persons or entities that purchased OSI Systems, Inc. (NASDAQ: OSIS) (“OSI” or the “Company”) securities between August 16, 2013 and December 5, 2017, inclusive (the “Class Period”).
OSI shareholders may, no later than February 5, 2018, move the Court for appointment as a lead plaintiff of the Class. If you purchased shares of OSI and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (844) 291-9299 or to sign up online, click here.
OSI Systems, Inc. produces medical monitoring and anesthesia systems, optoelectronic devices, and security and inspection systems. Its subsidiary Rapiscan Systems (“Rapiscan”) provides metal detectors and X-ray machines for screening luggage and cargo.
On January 18, 2012, OSI announced that Rapiscan had been awarded a six-year, $400 million contract to provide turnkey screening services to Mexico’s tax collection authority, Servicio de Administración Tributaria (“SAT”) (the “Mexico Turnkey Contract”).
On August 21, 2013, OSI announced that Rapiscan had been awarded a fifteen-year contract to provide turnkey screening services throughout Albania, stating that “[t]he Company currently anticipates that total gross revenues may range from $150 million – $250 million over the term of the agreement.”
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the pricing for the Mexico Turnkey Contract was premised on misrepresentations by the Company to SAT regarding the capabilities of Rapiscan’s equipment, and was accordingly overpriced relative to the value of the services provided to SAT; (ii) consequently, the Mexico Turnkey Contract was unlikely to be renewed or was likely to be renewed at terms less favorable to OSI; (iii) the Company’s revenues from the Mexico Turnkey Contract were therefore unsustainable; (iv) OSI had secured the Albania Turnkey Contract by corrupt means; (v) the Company’s revenues from the Albania Turnkey Contract were thus likewise unsustainable; (vi) OSI suffered from systemic, Company-wide problems with respect to legal and regulatory compliance; and (vii) as a result, OSI’s public statements were materially false and misleading at all relevant times.
On December 6, 2017, Muddy Waters Research published a report entitled “OSIS: Rotten to the Core” (the “Muddy Waters Report”). Citing a number of sources—including Albanian media reports, government documents, corporate filings, statements from former OSI employees, and statements from a former SAT official—the 19-page Muddy Waters Report asserted, inter alia, that: (i) OSI had secured the Albania Turnkey Contract by corrupt means; (ii) OSI had misled the SAT with respect to the capabilities of the Company’s machines and thus secured a “greatly inflated” price for the Mexico Turnkey Contract; and (iii) a culture of non-compliance with applicable laws and regulations was endemic at OSI, with “[f]ormer employees paint[ing] a reasonably consistent picture of a company operating with disregard for the law.”
On this news, OSI’s share price fell $24.55, or 29.2%, to close at $59.52 on December 6, 2017.
If you are a member of the class, you may, no later than February 5, 2018, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.