Newman Ferrara LLP announces that a class action lawsuit has been filed in the U.S. District Court for the District of Utah against Zagg, Inc. (“Zagg”) (Nasdaq: ZAGG) and certain of its officers and directors, alleging violations of federal securities laws.
Investors who purchased Zagg securities between February 28, 2012 and August 17, 2012 (the “Class Period”) may apply with the Court to be appointed Lead Plaintiff no later than November 5, 2012. The Lead Plaintiff will direct the litigation on behalf of the other class members. The Court will select the Lead Plaintiff from among applicants claiming the largest investment losses.
The Complaint alleges that the defendants issued false and/or misleading statements, and failed to disclose material facts, related to the sale of 860,200 shares of Zagg stock by Richard Pedersen, Zagg’s founder and CEO, which he used as collateral on personal loans and sold to satisfy margin calls. The Complaint alleges that the defendants became aware of Pedersen’s pledging of Zagg stock as collateral to meet margin calls as early as December 2011 but instead of disclosing that information, initiated a succession plan to replace Pedersen as CEO while concealing the true reason behind Pedersen’s departure.
On August 17, 2012, Zagg announced that Pedersen had resigned for unspecified reasons. However, beginning on August 20, 2012, the truth emerged that Pedersen’s departure was “entirely related to the margin calls situation that started last December and unfortunately surfaced again two weeks ago.” Zagg revealed that Pedersen had sold 345,000 shares of Zagg stock on December 21, 2011 and an additional 515,000 shares on August 14, 2012 to satisfy margin calls.Investors who purchased shares of Zagg stock during the Class Period and lost more than $100,000 are encouraged to contact Newman Ferrara attorney Roy Shimon at firstname.lastname@example.org or call (212) 619-5400 to discuss this lawsuit or the Lead Plaintiff process. Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation, securities fraud and shareholder litigation, consumer protection, civil rights, and real estate. For more information, please visit the firm website at www.nfllp.com.