Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the District of Utah on behalf of all persons or entities that purchased the securities of ZAGG Incorporated (“Zagg” or the “Company”) (NASDAQ GS: ZAGG) between February 28, 2012 and August 17, 2012, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers and directors (the “Complaint”). If you purchased shares of Zagg during the Class Period and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to email@example.com, or at: http://www.rigrodskylong.com/investigations/zagg-incorporated-zagg. Zagg, a Nevada corporation headquartered in Salt Lake City, Utah, designs, manufactures and distributes protective coverings, audio accessories and power solutions for consumer electronic and hand-held devices. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements regarding the Company’s business operations, financial condition and prospects. Specifically, the Complaint alleges (1) that Defendant Robert G. Pedersen (“Pedersen”) had placed more than 50% of his Zagg ownership as collateral on margin, jeopardizing his future with the Company; (2) that as a result of Pedersen’s reckless actions, the Company began a secret succession plan to replace him with Defendant Randall Hales (“Hales”) as Chief Executive Officer (“CEO”); and (3) that as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times. As a result of defendants’ false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period. According to the Complaint, unbeknownst to the Company’s shareholders, a “margin call situation” involving Pedersen began in December 2011, whereby Pedersen borrowed substantial amounts of monies, putting up his Zagg shares as collateral. Although Defendant Pedersen ultimately resigned his post as the Company’s CEO due to the “margin call situation,” investors were not informed that Pedersen had pledged Company stock until after his resignation over eight months later.
Then, on April 27, 2012, the Company filed a definitive proxy statement on a Schedule 14A (the “Proxy”). The Proxy contained the unanimous recommendation of the Company’s board of directors (the “Board”) that Zagg shareholders vote in favor of, inter alia, the reelection of all five of the Company directors, including Defendant Pedersen. The Board authorized the filing of this Proxy without any reference to Pedersen’s use of the Company stock as collateral. Pedersen was subsequently reelected to a new term as a Company director.Finally, on August 17, 2012, the Company disclosed the Pedersen had “stepped down as CEO and Chairman,” effective immediately. It was later revealed that Pedersen had resigned after selling shares of the Company stock to meet margin calls. Further, due to the “margin call situation,” the Company hired Defendant Hales as its President and Chief Operating Officer in December of 2011, and that Hales had been responsible for “much of the day to day responsibilities” of the Company since well before Pedersen’s resignation. On this news, shares of the Company declined more than 13% from a close of $8.42 per share on August 17, 2012 to $7.30 per share on August 20, 2012, on trading volume of over 4 million shares. If you wish to serve as lead plaintiff, you must move the Court no later than November 5, 2012. A lead plaintiff is a representative party acting 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. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.Attorney advertising. Prior results do not guarantee a similar outcome.