The Pomerantz Firm Charges Force Protection, Inc. With Securities Fraud -- FRPT


NEW YORK, March 25, 2008 (PRIME NEWSWIRE) -- Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court, District of South Carolina, Charleston Division, against Force Protection, Inc. ("Force Protection" or the "Company") (Nasdaq:FRPT) and certain officers of the company. The class action was filed on behalf of purchasers of the securities of the Company during the period from August 14, 2006 - February 29, 2008, inclusive (the "Class Period"). The complaint alleges violations of Section 10(b) and Section 20(a) of the Securities Exchange Act, and Rule 10b-5 promulgated there under.

Force Protection and its subsidiaries engage in the manufacture of ballistic and blast protected vehicles. The company is based in South Carolina. The complaint alleges that prior to and during the Class Period, defendants continually boasted that Force Protection's dominance in the Mine Resistant Ambush Protected ("MRAP") vehicles market was due to its superior product design and rapid delivery rates. In June 2007, the Inspector General of the Department of Defense questioned both of these claims and criticized the awarding of contracts to Force Protection on a sole source basis and without competitive bidding. The report noted that there were other U.S. companies that could have competed with Force Protections on both product capability and faster delivery schedules.

The complaint further alleges the following true facts, which were known by the defendants but concealed from the investing public during the class period: (1) as a result of the Company's ongoing problems in meeting contractual delivery deadlines, the Company would have trouble competing in the MRAP market; (2) in audit reports, the Defense Contract Audit Agency had been critical of the Company's finances and financial accounting system, which threatened the Company's eligibility to compete for government contracts; (3) the Company's accounting department suffered from material weaknesses and deficiencies and lacked the necessary staff and resources to perform its required functions; (4) contrary to the representations contained in the Company's SEC filings, the Company's internal controls were inadequate and easily manipulated, and, as a result, multiple areas of the Company's internal controls suffered serious deficiencies, including: (i) the financial closing process; (ii) accounting for inventory and the associated accounts payable expenses; (iii) stock-based compensation; and (iv) deferred tax balances; (5) the Company lacked effective internal controls in its financial reporting process, required to enable it to properly analyze and/or estimate Force Protection's future financial and operational performance; (6) defendants had caused the Company to falsely report at least its third quarter 2007 financial results.

As a result of the defendants' false statements, Force Protection's stock price traded at inflated levels during the Class Period and defendants were able to sell $87.4 million in Force Protection Stock. However, after the above revelations were revealed, the Company's shares were hammered by massive sales, sending them down 88% from their Class Period high.

If you are a shareholder who purchased the securities of Force Protection during the Class Period, you have until May 9, 2008 to ask the Court to appoint you as lead plaintiff for the class. Lead plaintiffs must meet certain legal requirements. Shareholders outside the United States may join the action. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Teresa L. Webb (tlwebb@pomlaw.com) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.

The Pomerantz Firm, which has offices in New York, Chicago, Washington, D.C., Columbus, Ohio and the San Francisco Bay area, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members.

More information on this and other class actions can be found on the Class Action Newsline at www.primenewswire.com/ca



            

Contact Data