- #CLASS ACTIO LAWSUITS AGAINST STARTEK FOR FULL#
- #CLASS ACTIO LAWSUITS AGAINST STARTEK FOR REGISTRATION#
- #CLASS ACTIO LAWSUITS AGAINST STARTEK FOR SERIES#
SCM includes packaging, fulfillment, marketing support, and logistics services. BPM includes provisioning management, wireless telephone number porting, receivables management, wireless telephone activations, and high-end technical support and customer care services. StarTek is a provider of business process outsourced services, consisting of two broad areas: business process management ("BPM") and supply chain management services ("SCM"). Because the issues raised in this Motion to Dismiss require a somewhat different analysis than my previous Order, I will again review the basic chronology and alleged misrepresentations upon which Plaintiff's claims are based. It contains the same claims as those addressed in my previous Order, with the exclusion of Defendants Toni Stephenson and Pam Oliver as defendants in the Section 20(a) claim. The ACC, filed after my Order, contains essentially the same allegations regarding the course of conduct by StarTek and its principals and is again over 100 pages, much of it highly repetitive. However, I concluded that the plaintiffs had not alleged facts showing that Defendants Toni Stephenson and Pamela Oliver exercised power or authority to cause StarTek to engage in the alleged unlawful conduct, and therefore they could not be liable as control persons under Section 20(a). I further determined that the Third and Fourth Claims for relief could proceed because the plaintiffs had adequately alleged facts showing material misrepresentations/omissions, resulting losses, and scienter.
#CLASS ACTIO LAWSUITS AGAINST STARTEK FOR REGISTRATION#
In my earlier Order (doc no 52), I concluded that the Section 11 and Section 15 claims should be dismissed without prejudice because the allegations did not show that the named plaintiffs could trace their shares to the registration statement and therefore lacked standing. The previous consolidated complaint (doc no 25) contained the following claims: 1) violations of Section 11 of the Securities Act by Defendants Startek, Meade, McKenzie, Stephenson and Morgan in connection with the filing of the registration statement, 2) violations of Section 15 of the Securities Act by all individual defendants as controlling persons, 3) violations of Section 10(b) of the Exchange Act and Rule 10b-5 by all defendants, and 4) violations of Section 20(a) of the Exchange Act by all defendants as controlling persons. Plaintiff alleges that the individual Defendants took advantage of the artificially inflated stock price to sell their own shares at various times during the class period. According to Plaintiff, these activities concealed weak demand for the company's products and other problems, some of which ultimately came to light in March 2005 when the company announced substantial declines in its gross margins, and which resulted in a severe drop in the stock price by when the company announced a significant decline in its per share earnings.
#CLASS ACTIO LAWSUITS AGAINST STARTEK FOR SERIES#
The alleged securities fraud apparently arises from a series of events that occurred between Februand ("the class period"), including the issuance of press releases in 2003, the filing of a registration statement in February 2004, and subsequent amendments thereto which culminated in an offering of StarTek securities for sale in June 2004, and the publication of various public statements after the offering. The named Plaintiff alleges that it is a shareholder who purchased or otherwise acquired StarTek common stock at "artificially inflated prices" and suffered damages when the stock price fell. Stephenson and Pamela Oliver, who were major shareholders or controlled major shareholders of the company. Emmet Stephenson, William Meade, Michael Morgan and Eugene McKenzie, who at relevant times were officers and/or directors of StarTek, and Toni E. ("StarTek"), and the individual named defendants, A. These consolidated cases, originally brought as two separate class actions on behalf of shareholders, allege securities fraud by corporate defendant StarTek, Inc. The operative pleading at this time is Plaintiff's Amended Consolidated Complaint (doc no 60) ("ACC"), which remedies some of the pleading defects in the earlier complaint and contains additional allegations supporting the claims.
#CLASS ACTIO LAWSUITS AGAINST STARTEK FOR FULL#
Much of the background of this securities fraud case was recited in full in my earlier Order on Motion to Dismiss (doc no 52), which concerned alleged deficiencies in a previously-filed complaint (doc no 25). For the reasons that follow, the motion to dismiss will be granted in part and denied in part. Upon review of the parties' filings, I conclude oral argument is not required. This matter comes before me on Defendants' Motion to Dismiss (doc no 61), filed June 5, 2008.
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