Abraham, Fruchter & Twersky, LLP has filed a class action lawsuit in the US District Court for the Northern District of California, against Immersion Corporation (Immersion) and some of its officers and directors. The lawsuit was filed on behalf of shareholders who purchased Immersion common stock between May 3, 2007 and June 30, 2009 (Class Period).
The complaint alleges that defendants violated Sections 10(b) of the Securities Exchange Act of 1934. The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the company’s transactions in its Medical line of business.
According to the complaint, defendants failed to disclose that Immersion’s revenue recognition practices in its Medical line of business were improper. This caused Immersion’s stock to be artificially inflated during the Class Period, with prices reaching a high of $20.50 per share on July 13, 2007. On July 1, 2009, the company issued a press release announcing that the Audit Committee of the company’s board was conducting an internal investigation into certain previous revenue transactions in its Medical line of business, which could raise issues with respect to its previously-reported financial information, which could be material. On this news, Immersion’s stock dropped to close at $3.80 per share that day.
Immersion is a developer, licensor and marketer of digital touch technology and products.