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Investors who are current long term stockholders in shares of Zagg Inc (NASDAQ:ZAGG)
The plaintiff alleges that the former CEO of Zagg exposed the company to hundreds of millions of dollars in potential liability by making secret collateral pledges with his company stock.
The lawsuit follows a lawsuit filed earlier in 2012 against Zagg over alleged securities laws violations. According to that complaint the plaintiff alleges that unbeknownst to NASDAQ:ZAGG shareholders, a "margin call situation" involving former CEO Robert G. Pedersen began in December 2011, whereby Robert G. Pedersen borrowed substantial amounts using his Zagg shares as collateral. The plaintiff says that although Robert G Pedersen ultimately resigned in August 2012 as the Company's CEO investors were not informed that he had pledged Zagg stock until after his resignation over eight months later.
On December 21, 2011, Pedersen sold nearly $2.6 million worth of Zagg stock. The plaintiff says that at the time, shareholders were only informed that Robert Pedersen sold the stock to "meet an immediate financial obligation."
On August 17, 2012, Zagg Inc that its board of directors accepted that Pedersen had "stepped down as CEO and Chairman" effective immediately.
The plaintiff says that it was later disclosed that Pedersen had resigned after selling over 500,000 shares of Zagg common stock on August 14, 2012, at prices ranging between $8.10 and $8.43, to meet margin calls.
The plaintiff says that in a conference call held on August 28, 2012, Zagg Inc disclosed that Pedersen had sold an additional 1.2 million shares of Zagg stock to meet margin requirements.
Shares of Zagg Inc (NASDAQ:ZAGG)
On December 17, 2012, NASDAQ:ZAGG shares closed at $7.59 per share, which is significantly below its current 52 week high of $13.29 per share.
Those who are current long term stockholders in shares of Zagg Inc (NASDAQ:ZAGG)
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