Glancy Prongay & Murray LLP (GPM), a national shareholder rights law firm, announces that a class action lawsuit has been filed on behalf of investors who purchased or otherwise acquired Seagate Technology Holdings plc common stock between September 15, 2020 and October 25, 2022, inclusive.
Seagate investors have until September 8, 2023 to file a lead plaintiff motion.
On October 26, 2022, before the market opened, Seagate disclosed that it had been warned by the US Commerce Department’s Bureau of Industry and Security (BIS) that it may have violated export control laws by selling HDDs to a customer on the trade blacklist, reportedly China-based Huawei.
On this news, Seagate’s stock fell $4.61, or 7.9%, to close at $53.39 on October 26, 2022, thereby injuring investors.
The complaint filed in this class action alleges that throughout the class period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects.
Specifically, defendants failed to disclose to investors:
- (1) the nature and magnitude of Seagate’s HDD sales to Huawei, including that Seagate experienced a significant acceleration in sales to Huawei immediately after the BIS rules went into effect and Seagate’s competitors stopped selling to Huawei;
- (2) that the underlying details of Seagate’s HDD manufacturing process, including the use of covered US software and technology in “essential ‘production'” processes, rendered its sales to Huawei in violation of the BIS export rules;
- (3) as a result, Seagate was in blatant violation of the BIS export rules which resulted in an ongoing investigation by the US Department of Commerce and exposed the Company to hundreds of millions of $s in fines and penalties; and
- (4) as a result, Defendants’ positive statements about the company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.