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Class Action Launched Against Harman

  Breaking Legal News  -   POSTED: 2007/10/03 10:18

Notice is hereby given that a class action has been commenced on behalf of an investor in the United States District Court for the District of Columbia on behalf of its client and on behalf of other similarly situated purchasers of Harman International Industries, Inc. ("Harman" or the "Company") (NYSE: HAR) common stock between April 26, 2007 through and including September 24, 2007 (the "Class Period"). Stull, Stull & Brody has substantial experience representing employees who suffered losses from purchases of their employer's stock in their 401(k) plans. If you bought Harman International stock through your Harman International retirement account and have information or would like to learn more about these claims, please contact us.

The complaint charges Harman and several of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act"). It is alleged that defendants omitted or misrepresented material adverse facts about the Company's financial condition, business prospects, and revenue expectations during the Class Period. Harman claims to be a leading manufacturer of high-quality, high fidelity audio products and electronic systems for the automotive, consumer and professional markets in the Americas, Europe, and Asia. The Company operates under the brands names Harman Kardon, JBL, Revel, Mark Levinson, Infinity, Lexicon, Soundcraft-Studer, AKG, Becker, and QNX, and is traded on the New York Stock Exchange.

The complaint alleges that on April 26, 2007, the Company announced that it had entered into a contract in which two investment funds affiliated or sponsored by private investment companies, Kohlberg Kravis Roberts & Co. L.P. ("KKR") and GS Capital Partners VI Fund, L.P. ("GSCP") (KKR and GSCP are collectively referred to as the "Purchasing Companies" herein), would merge with Harman (the "Merger"). According to the complaint, the Merger was valued at approximately eight billion dollars ($8,000,000,000).

Specifically, the complaint alleges that, during the Class Period, defendants issued numerous materially false and misleading statements which caused Harman's securities to trade at artificially inflated prices. As alleged in the complaint, these statements were materially false and misleading because they misrepresented and failed to disclose that: (1) the Company had breached the Merger agreement with KKR and GSCP and thus placed the Merger in serious doubt; (2) the Company needed to sustain higher research and development ("R&D") costs primarily related to its automotive platform awards; (3) the Company's inventory was greater than disclosed and was negatively impacting its cash flows; (4) its relationship with DaimlerChrysler had materially worsened; (5) a material adverse change in Harman's business had occurred which related to capital spending; (6) the Company's financial health had generally deteriorated; and (7) as a result of the foregoing, the Company's statements about its financial well-being, earnings, and future prospects were lacking in a reasonable basis when made.

According to the complaint, on September 21, 2007, the Company shocked the market and announced that the Purchasing Companies "no longer intend to complete the previously announced acquisition....KKR and GSCP have informed Harman that they believe that a material adverse change in Harman's business has occurred, that Harman has breached the merger agreement and that they are not obligated to complete the merger." The complaint alleges that this news caused the Company's share price to fall from a closing price of $112.25 on September 20, 2007, to close at $85.00 on September 21, 2007, on unusually heavy volume. Then, on September 24, 2007, the complaint alleges that the Company announced that it would fail to meet its financial guidance for the quarter ended September 30, 2007, and needed to significantly reduce its estimates for the FY 2008. According to the complaint, this news caused the Company's share price to fall to $80.31 on extremely high volume of over 14.5 million shares.

Plaintiff seeks to recover damages on behalf of all those who purchased or otherwise acquired Harman International common stock during the Class Period, which is between April 26, 2007 through and including September 24, 2007. If you purchased or otherwise acquired Harman International common stock during the Class Period, and either lost money on the transaction or still hold the securities, you may wish to join in the action to serve as lead plaintiff. If you purchased Harman International common stock during the Class Period, you may request that the Court appoint you as lead plaintiff no later than November 30, 2007.

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Stull, Stull & Brody, or other counsel of your choice, to serve as your counsel in this action. Stull, Stull & Brody has litigated many class actions for violations of securities laws in federal courts over the past 30 years and has obtained court approval of substantial settlements on numerous occasions. Stull, Stull & Brody maintains offices in New York and Los Angeles.

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