SAN JOSE (CN) - A federal judge granted preliminary approval to a $12.5 million class settlement that claims OmniVision Technologies misled shareholders into believing it had an exclusive contract related to the Apple iPhone.
U.S. District Court Judge Ronald Whyte on Wednesday preliminarily approved the settlement for those who purchased or acquired shares of OmniVision's stock from April 27, 2010 through Nov. 6, 2011.
Lead plaintiffs Oakland County Employees' Retirement System, Laborers' District Council and Contractors' Pension Fund of Ohio, and Woburn Retirement System claimed that when the truth emerged about OmniVision's contract with Apple, OmniVision's stock priced dropped from $34.67 to $14.26.
Shareholders claimed that the company made false and misleading statements about the technological advantages of its CMOS image sensor versus its competitors', and its competitive position with customers such as Apple.
These misrepresentations deceived the market into believing that OmniVision was maintaining its exclusive position as the supplier of the CMOS image sensors to Apple's new smartphone, causing the tech company's stock to be artificially inflated, according to the lawsuit.
The stock plummeted when it was disclosed that OmniVision had lost its supply position with Apple regarding the iPhone 4 to competitor Sony.
In March 2013, Whyte declined to dismiss the action after finding that misleading statements allegedly made by CFO Anson Chan regarding OmniVision's competitive lead and the company's relationship with its customers were actionable .
The shareholders agreed to release their claims as part of the proposed settlement.
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