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OSI Systems, Inc.

CASE CAPTION Arkansas Teacher Retirement System, et al. v. OSI Systems, Inc. et al.
COURT United States District Court for the Central District of California
CASE NUMBER 17-8841 FMO (SKx)
JUDGE Honorable Fernando M. Olguin
PLAINTIFF Arkansas Teacher Retirement System (“ATRS”)
DEFENDANTS OSI Systems, Inc. (“OSI” or the “Company”), Deepak Chopra, Ajay Mehra, and Alan Edrick
CLASS PERIOD August 21, 2013 through February 1, 2018, inclusive

This securities fraud class action case arises out of Defendants’ representations and omissions regarding the success of OSI’s “turnkey” security screening solutions business and its announcement of a major $150 million to $250 million contract with the government of Albania. During the Class Period, OSI touted the Albanian contract as evidence that its turnkey business was gaining traction in the market and would “transform” the Company’s business model. Unbeknownst to investors, the Albanian contract was subject to an undisclosed profit-sharing arrangement whereby OSI previously sold 49% of the OSI subsidiary holding the rights to the Albanian contract to an Albanian construction company (“ICMS”) owned by an obscure Albanian dentist with reported ties to the outgoing Albanian government, for only 490 Leke—the equivalent of $4.50.

ATRS filed a 139-page complaint in June 2019 on behalf of a putative class of investors alleging that OSI and its former executives, including CEO Deepak Chopra, CFO Alan Edrick, and Executive Vice President Ajay Mehra, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements and concealing material facts about the success of OSI’s turnkey business and its new contract with the Albanian government. As alleged, following a series of revelations about OSI’s Albanian contract arrangement and related government investigations, OSI’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.

On September 7, 2021, the parties announced that they had reached an agreement in principle to resolve the action. On December 30, 2021, the Court approved ATRS’s motion for preliminary approval. On February 28, 2022, ATRS filed its motion for final approval of the settlement. A final approval (fairness) hearing is scheduled for May 12, 2022

Read First Amended Consolidated Class Action Complaint Here

Read Order Denying Motion to Dismiss Here

Read Final Approval Brief Here