This securities class action alleges that TCP International Holdings failed to disclose material facts relating to the company's chairman and improper personal payments he made relating to the business, did not disclose improper relationships with he had with vendors and misled investors with regard to the company's business operations and future prospects.
What investors are part of this class action? The class period is currently defined as all purchasers of TCP International securities between May 8, 2015 and November 5, 2015 (the "Class Period"). TCP International stock trades on the NYSE under the ticker symbol TCPI.
Procedural Status: This lawsuit was filed on November 11, 2015 and is captioned Bai v. TCP International Holdings Ltd., et al. It was filed in the United States District Court for the Southern District of New York. Its civil docket number is 1:15-cv-08889. The lead plaintiff deadline is January 10, 2016.
Defendant TCPI is a corporation with its principal executive offices located at Cham, Switzerland, and Ellis Yan served as its CEO from the company's founding in 1995 until July 2015 and at all relevant times also served as the company's chairman. TCPI, together with its subsidiaries, designs, develops, manufatures and markets lamps, fixtures, and Internet-based lighting control solutions for retail, commercial and industrial customers across the globe.
The plaintiff in this case purchased TCPI common stock during the Class Period and is now alleging significant damages suffered as a result of the defendants' violations of federal securities law and false and misleading statements and material omissions they committed. Specifically, on May 8, 2015, TCPI filed a quarterly report on Form 10-Q which stated in part that on April 15, Ellis Yan entered into a separation agreement with the company whereby he would not renew is employment agreement upon its June 30 expiration date. He was slated to receive severance of three years' salary as well as continuation of medical, dental and other health coverage.
The statement futher noted that Yan's actions were "inconsistent with setting an appropriate tone at the top" and did not "facilitate the flow of information to manage the activities of the Company" or ensure timely evaulation of financial reporting matters. The end result was described as a material misstatement in a financial statement which was ultimately rectified. The statement also included a pledge of a thorough review of organizational structure and improved internal communication.
On August 7, 2015, TCPI filed a quarterly report which made similar statements about Yan's conduct, but again failed to disclose the truth. On November 5, 2015, TCPI announced that third-quarter results would be delayed due to a pending investigation by the Audit Committee concerning the proprietry of Yan's improper payments with his personal funds relating to the business and improper relationships between Yan, company vice-chairman Zhaoling Yan and certain vendors. It was stated at that time that the Audit Committee had retained independent legal and accounting advisors in connection with the probe.
According to the plaintiff, these revelations caused TCPI stock to fall $1.02, or more than 54%, to close at $1.20 on November 6, 2015. Because TCPI securities were artifically inflated during the Class Period due to defendants' conduct, the plaintiff seeks payment of all damages sustained, prejudgment and post-judgment interest and reasonable attorney fees and costs associated with bringing the action.
This case is in the notice period. When a shareholder brings suit under certain federal securities laws, generally that shareholder must give notice via a press release. This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will continue to review the docket and update this page as warranted.