Dhb Industries (AMEX:DHB)
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The law firm of Milberg Weiss Bershad & Schulman LLP
announces that a class action lawsuit was filed today on behalf of
purchasers of the securities of DHB Industries Inc. ("DHB" or the
"Company") (AMEX: DHB) between April 29, 2004 to August 29, 2005,
inclusive (the "Class Period"), seeking to pursue remedies under the
Securities Exchange Act of 1934 (the "Exchange Act").
If you bought the securities of DHB between April 29, 2004 to
August 29, 2005 and sustained damages, you may, no later than November
8, 2005, request that the Court appoint you as lead plaintiff. A lead
plaintiff is a representative party that acts 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. Under certain
circumstances, one or more class members may together serve as "lead
plaintiff." Your ability to share in any recovery is not, however,
affected by the decision whether or not to serve as a lead plaintiff.
You may retain Milberg Weiss Bershad & Schulman LLP, or other counsel
of your choice, to serve as your counsel in this action.
The action, numbered 05-CV-4332, is pending in the United States
District Court for the Eastern District of New York against defendants
DHB, David H. Brooks (CEO and Chairman), Dawn M. Schlegel (CFO) and
Sandra L. Hatfield (COO). A copy of the complaint filed in this action
is available from the Court, and can be retrieved from the clerk's
office and various services, or can be viewed on Milberg Weiss's
website at: http://www.milbergweiss.com
The complaint alleges that defendants' Class Period positive
representations regarding DHB's fast-growing business, disseminated in
press releases and SEC filings, were materially false and misleading
because they failed to disclose that a material portion of the
Company's bulletproof vests contained a material amount of Zylon
fibers whose effectiveness at stopping bullets degraded over time. By
the beginning of the Class Period, defendants knew, or recklessly
disregarded, that vests containing Zylon could potentially fail to
stop bullets because of fiber degradation, and that serious concerns
about their use in body armor was growing in the law enforcement
community. Defendant, however, failed to warn investors of the
palpable and substantial risk that its Zylon products posed to the
Company's business.
While the price of the Company's securities was artificially
inflated, and before its collapse, DHB insiders, including defendants
Brooks, Schlegel and Hatfield, sold a total of 11,288,789 million
shares of DHB common stock, reaping gross proceeds of over $220
million. Of that amount, defendant Brooks sold over 10.4 million
shares for proceeds exceeding $204 million. The average price at which
insiders sold their DHB stock was $19.51.
On August 30, 2005, before the open of ordinary trading, DHB
issued a press release announcing that it stopped using Zylon in its
body armor after the National Institute of Justice revoked its
certification of Zylon-containing body armor. In addition, the Company
announced that it would replace all Zylon vests in the field. This
replacement program would result in an estimated $60 million charge in
the third quarter of 2005.
On this news, the price of DHB common stock fell by 23% in one
day, from $6.66 per share on August 29, 2005 to $5.10 per share on
August 30, 3005, on unusually heavy trading volume. DHB's tock price
continued to decline, falling to $4.58 by the close of August 31,
2005. The insiders who sold their shares during the Class Period, at
the average price of $19.51 per share, avoided tremendous losses.
Milberg Weiss Bershad & Schulman LLP (http://www.milbergweiss.com)
is a firm with over 100 lawyers with offices in New York City, Los
Angeles, Boca Raton, Delaware, Seattle and Washington, D.C. and is
active in major litigations pending in federal and state courts
throughout the United States. Milberg Weiss has taken a leading role
in many important actions on behalf of defrauded investors, consumers,
and others for nearly 40 years. Please contact the Milberg Weiss
website for more information about the firm. If you wish to discuss
this action with us, or have any questions concerning this notice or
your rights and interests with regard to the case, please contact the
following attorneys:
Steven G. Schulman
Peter E. Seidman
Andrei V. Rado
One Pennsylvania Plaza, 49th fl.
New York, NY, 10119-0165
Phone number: (800) 320-5081
Email: sfeerick@milbergweiss.com
Website: http://www.milbergweiss.com