On December 5, 2013, after the market closed, OSI Systems, Inc. (Nasdaq: OSIS) announced that its security division, Rapiscan Systems, was notified by the U.S. Transportation Security Administration (“TSA”) that a delivery order placed with Rapiscan on September 26, 2013 for Advanced Technology X-Ray (AT-2) based systems was being terminated for default. As a result, the Company said it has de-booked the order which had a value of approximately $60 million. The next trading day, December 6, 2013, shares of OSI Systems’ common stock declined by $6.97 per share, nearly 10%, to close at $64.75 per share.
On December 9, 2013, OSI Systems issued a press release, explaining that the Company “believes the termination resulted from Rapiscan’s use of an upgraded component in the AT-2 detection systems”, and that although “the component change was vetted by Rapiscan’s internal quality assurance, it did not meet the contractual requirement of obtaining TSA’s approval in advance.” Bloomberg News reported that “a part in new baggage-scanning machines made under the canceled contract was manufactured in China” and that the Company “didn’t get TSA’s approval for the part, violating its contract.”
On December 9, 2013, following this news, OSI System’s stock price plunged by $17.37 per share, nearly 27%, to close at $47.38 per share. The Wites Law Firm seeks to uncover additional information about this substantial loss of shareholder value, and potential investor claims against OSI.
If you are an investor who purchased OSI Systems stock you may have a legal claim against the Company and could serve as the lead plaintiff in a class action lawsuit. If you are interested in being the lead plaintiff, or would like to speak with an attorney about your legal rights, contact the attorneys at Wites Law Firm by email at info@witeslaw.com or toll-free at 1 (866) 277-8631.
Wites Law Firm is a law firm with offices in Oakland, California and Lighthouse Point, Florida, with expertise in the representation of investors in securities fraud and investor litigation claims. You may visit its website atwww.wklawyers.com.
