A shareholder lawsuit has been filed in the Eastern District of Wisconsin on behalf of investors that purchased or otherwise acquired KOSS Corporation (NASDAQ: KOSS) stock between July 12, 2005 and December 21, 2009. Shareholders interested in serving as lead plaintiff for this class action have until March 12, 2010, to inform the court. For more information, contact Carney Williams.
The Company and certain key executives are alleged to have violated federal securities laws by issuing false financial statements and failing to maintain adequate internal and financial controls.
On December 21, 2009, KOSS announced that the NASDAQ had halted trading of the Company’s stock at its request due to the discovery of unauthorized transactions. Further, the Company announced the appointment of a special committee of independent board members charged with investigating the unauthorized transactions and their impact upon company financial statements. Sujata “Sue” Sachdeva, Vice President of Finance and Secretary of KOSS, as well as Principal Accounting Officer, was placed on administrative leave pending the results of the internal investigation.
On December 24, 2009, KOSS announced an expansion of the scope of its investigation and began to slowly reveal the unthinkable truth - that Vice President Sue Sachdeva has engaged in a $31 million dollar shopping spree spanning more than four years all at the expense of Company shareholders. A criminal complaint has been filed against Sachdeva for wire fraud in connection with her lavish shopping spree.KOSS has revealed that unauthorized transactions by Sachdeva date back prior to the 2005 fiscal year. Sachdeva has been terminated and two employees that worked under her supervision in the Accounting Department have been placed on administrative leave. KOSS has also announced the dismissal of Grant Thorton, LLP, its former independent auditor. KOSS further announced that its previously issued financial statements for fiscal years June 30, 2005 through 2009 and the three months ended September 30, 2009, should no longer be relied upon. On January 11, 2010, when trading of KOSS stock resumed after being halted for approximately three weeks, shares declined almost 24%.