Smart Technologies Judge Certifies Class in IPO LawsuitPatricia Hurtado
A federal judge certified the plaintiff class in a lawsuit against Smart Technologies Inc. stemming from the company’s initial public offering, limiting the group to U.S. purchasers of stock in the company’s 2010 IPO.
Officers of the Calgary-based company, which produces interactive whiteboards used in classrooms, made false and misleading statements in the registration and prospectus for the company’s initial offering and had already experienced disappointing results before the IPO, according to a complaint filed in U.S. District Court in Manhattan in 2011.
Smart Technologies’ initial sale, which raised $660 million, was the biggest by a Canadian technology company in at least a decade.
The plaintiffs allege that the true financial condition of the company was “belatedly disclosed” after the market closed on Nov. 9, 2010, when Smart Technologies “shocked investors” and reported disappointing results for the fiscal second quarter that ended Sept. 20, the same period during which the IPO was conducted.
The following day when shares of the company resumed trading, Smart Technologies stock dropped more than 30 percent, from $13.07 on Nov. 9 to close at $8.91. Published news reports described the drop, with Chief Executive Officer Nancy Knowlton saying in a statement that the company had seen “slower than anticipated sales,” according to the complaint.
U.S. District Judge Katherine Forrest, who is presiding over the case, ruled that the case of plaintiffs would include “all persons or entities who purchased or otherwise acquired (and did not sell) SMART common stock in the U.S. prior to Nov. 10, 2010,” she said.
Jeremy Patrick Robinson, a lawyer for the lead plaintiff, the City of Miami General Employees’ and Sanitation Employees’ Retirement Trust, didn’t immediately return a voice-mail message left at his office seeking comment about the ruling.
Laurie James Long, a spokesman for Calgary-based Smart Technologies, said the company has no comment on the ruling.
The case is In re Smart Technologies Inc. Shareholders Litigation, 11-cv-7673, U.S. District Court, Southern District of New York (Manhattan).