NEW YORK, Oct. 1, 2012 /PRNewswire/ -- Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential securities fraud at Zagg Incorporated ("Zagg" or the "Company") (NasdaqGS: ZAGG).
The investigation focuses on whether the Company and its executives violated federal securities laws by failing to disclose that: (1) Zagg founder and CEO Robert G. Pedersen had placed more than 50% of his Zagg ownership as collateral on margin, jeopardizing his future with the Company; (2) resulting from Pedersen's reckless actions, the Company began a secret succession plan to replace him; and (3) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On December 21, 2011, Pedersen sold nearly $2.6 million worth of Zagg stock. However, at the time, shareholders were only informed that Pedersen sold the stock to "meet an immediate financial obligation."
On April 27, 2012, the Company filed a definitive proxy statement on a Schedule 14A (the "Proxy"). The Proxy contained the unanimous recommendation of the Company board of directors (the "Board") that Zagg shareholders vote in favor of, inter alia, the reelection of all five of the Company directors, including Pedersen. However, despite the Board's knowledge of Pedersen's stock pledges, the Board authorized the filing of the Proxy without including any reference to Pedersen's use of Company stock as collateral. The omission of this information rendered the Proxy materially false and misleading.
On August 17, 2012, the Company disclosed that Pedersen had "stepped down as CEO and Chairman" effective immediately. It was later disclosed that Pedersen had resigned after selling 515,000 shares of Zagg common stock on August 14, 2012, at prices ranging between $8.10 and $8.43, to meet margin calls.
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If you purchased Zagg securities between February 28, 2012 and August 17, 2012 and would like to discuss your legal rights, visit http://faruqilaw.com/Zagginc. You can also contact us by calling Richard Gonnello or Francis McConville toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to firstname.lastname@example.org or email@example.com. Faruqi & Faruqi, LLP also encourages anyone with information regarding Zagg's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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FARUQI & FARUQI, LLP
369 Lexington Avenue, 10th Floor
New York, NY 10017
Attn: Richard Gonnello, Esq.
Francis McConville, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
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