SOURCE: Bronstein, Gewirtz & Grossman, LLC

January 20, 2010 11:57 ET

Bronstein, Gewirtz & Grossman, LLC Announces Class Action Lawsuit Against Koss Corporation

NEW YORK, NY--(Marketwire - January 20, 2010) - Bronstein, Gewirtz & Grossman, LLC announces that a class action has been filed in the United States District Court for the Eastern District of Wisconsin on behalf of those who purchased or otherwise acquired stock of Koss Corporation ("Koss" or the "Company") (NASDAQ: KOSS) during the period between July 12, 2005 through and including December 21, 2009 (the "Class Period").

The Complaint charges Koss and certain of the Company's current and former executive officers with violations of federal securities laws. The complaint alleges that throughout the Class Period defendants knew or disregarded that their public statements concerning Koss's financial performance were false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that certain Company employees had devised and carried out a scheme to defraud investors and divert Company funds potentially exceeding $31 million; (2) that the Company's financial statements and corporate bank account balances had been manipulated to conceal the diversion of corporate funds; (3) that, as a result, the Company's financial results were overstated during the Class Period; (4) that the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); (5) that the Company lacked adequate internal and financial controls; and (6), as a result of the above, that the Company's financial statements were materially false and misleading at all relevant times.

On December 21, 2009, Koss shocked investors when it announced that NASDAQ halted trading of Koss stock at the Company's request after it discovered certain unauthorized transactions at the Company, and the Board of Directors had appointed a special committee of independent directors to lead an internal investigation to determine the effect of the transactions of Koss's Financial statements.

On December 24, 2009, the Company announced that its Principal Accounting Officer had been terminated and two members of its accounting staff who served under her had been placed on unpaid administrative leave. Thereafter, the Company announced that its internal investigation had been expanded to include the fiscal year 2005 and preliminary estimated that the amount of the transactions had exceeded $31 million. Koss further announced that it had dismissed Grant Thorton LLP as its independent auditors, and its previously issued financial statements for the fiscal years ended June 30, 2005 through 2009 and the three months ended September 30, 2009, should no longer be relied upon due to the unauthorized financial transactions.

On January 11, 2009, when trading in Koss stock resumed, shares of the Company's stock declined $1.32 per share, approximately 24%, to close on January 11, 2010, at $4.19 per share, on unusually heavy volume.

No Class has yet been certified in the above action. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact either Peretz Bronstein or Eitan Kimelman of Bronstein, Gewirtz & Grossman, LLC at 212-697-6484 or via email Those who inquire by e-mail are encouraged to include their mailing address and telephone number. March 16, 2010 is the deadline for investors to seek a lead plaintiff appointment.

Bronstein, Gewirtz & Grossman, LLC is a corporate litigation boutique. Our primary expertise is the aggressive pursuit of litigation claims on behalf of our clients. In addition to representing institutions and other investor plaintiffs in class action security litigation, the firm's expertise includes general corporate work, private securities offerings, and securities arbitration.

Contact Information

  • Peretz Bronstein or Eitan Kimelman
    Bronstein, Gewirtz & Grossman, LLC
    Email Contact