Cemtrex Announces Settlement of Class Action Securities Lawsuit & Derivative Actions
October 17 2018 - 08:45AM
Business Wire
Cemtrex Inc. (Nasdaq: CETX, CETXP, CETXW), a world leading
technology and manufacturing company, announced today that the
Company has agreed to settle the pending alleged securities class
action lawsuit filed against it in the Eastern District of New
York. The Company has also agreed to settle the related stockholder
derivative litigation filed in the Eastern District of New York and
New York state court.
Under the class action settlement, the Company specifically
denies that it has engaged in any wrongdoing or had liability. On
behalf of the defendants, the Company’s insurer will pay $625,000
to the class of plaintiffs to resolve all claims that the
plaintiffs asserted or could have asserted in the litigation.
Under the derivative litigation settlement, the Company will
implement certain corporate governance changes and modify certain
governance practices, and the Company’s insurer will pay $100,000
to the plaintiffs’ counsel. Like the class action settlement, the
derivative litigation settlement will resolve all claims that were
or could have been asserted in the litigation, and the Company and
the directors and officers of the Company named as defendants
continue to deny any liability or wrongdoing in connection with the
allegations contained in the lawsuit.
“We are pleased to be putting the uncertainty around these
lawsuits behind us, which we believe is beneficial to the Company
and its shareholders. After carefully evaluating the merits of
trying the case versus settling it, we chose the latter as any
continued litigation of the Actions would be protracted,
burdensome, and expensive for the Company. This settlement
concludes this matter expeditiously with no additional costs to the
Company and further avoids interference on operations,” said Saagar
Govil, Cemtrex’s Chief Executive Officer. “With this action behind
us, we can stay focused on our business and more specifically, the
SmartDesk, which we launched earlier this year through our own
in-house research & development efforts and is gaining
tremendous traction and market acceptance from major corporations,
academic institutions, and government organizations.”
The settlements are subject to several conditions, including
formal settlement documentation and court approval.
As the parties were in the process of reaching the class action
settlement, the Company filed a reply brief in support of its
motion to dismiss the plaintiffs’ amended complaint in the
securities class action. A copy of the reply brief is available on
Cemtrex’s Investor Relations page here. Full docket information
including all filings in the class action litigation can be found
under the case caption: Cullinan v. Cemtrex, Inc. et al., Case No.
2:17-cv-01067-JFB-AYS (E.D.N.Y. filed May 7, 2018). The dockets for
the derivative litigations are also available under the following
captions: Alami v. Govil, et al., No. 606635/2017 (N.Y. Sup. Ct.,
Suffolk County filed April 10, 2017); Desmond-Newman v. Govil, et
al., Case No. 2:18-cv-03992 (E.D.N.Y. filed July 11, 2018); Scharf
v. Govil, et al., Case No. 1:18-cv-04596 (E.D.N.Y. filed August 15,
2018).
The Company is represented by Doug Greene, a nationally
prominent securities litigation attorney, of the law firm of Baker
Hostetler.
About Cemtrex
Cemtrex, Inc. (CETX) is the manufacturer of the SmartDesk, the
world’s most advanced workstation. Cemtrex is a diversified
technology company that's driving innovation in a wide range of
sectors, including smart technology, virtual and augmented
realities, advanced electronic systems, industrial solutions, and
intelligent security systems.www.cemtrex.com
Safe Harbor Statement
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements relating to our new product offerings or
any proposed fundraising activities. These forward-looking
statements are based on management's current expectations and are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those set forth in or implied by
such forward looking statements. Statements made herein are as of
the date of this press release and should not be relied upon as of
any subsequent date.
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Investor RelationsCemtrex, Inc.Phone:
631-756-9116investors@cemtrex.comorGeneral
Inquiriessales@cemtrex.com
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