Oct. 14, 2002 — A U.S. District Court has denied Nanophase Technologies Corp.’s motion to dismiss a class action lawsuit filed against it.
The decision of the U.S. District Court for the Northern District of Illinois on Oct. 9 is based on a shareholder lawsuit filed in March against Nanophase. That was amended to the original complaint filed in November by an individual who bought 200 shares of the company’s common stock.
The class action complaint alleges Nanophase improperly booked revenue and misled shareholders concerning a deal with Celox Ltd. for the sale of a nanocrystalline environmental catalyst. The suit alleges such actions caused Nanophase’s stock price to rise, inflicting damages on investors.
Nanophase officials said in a written statement they believe the claims are groundless and plan to “vigorously contest” them.
The same court in January ordered final approval of an $800,000 settlement of another class action lawsuit filed against Nanophase. The lawsuit, one of several filed against Nanophase dating from 1998, alleged the company misrepresented its sales to boost the price of its initial public offering in 1997. A $4 million settlement covering five suits was reached last year.
Nanophase’s stock, traded on Nasdaq, was $2.78 midday, down from $3.15 on Friday.