NEWPORT BEACH — Pacific Scientific Co. said Thursday that it has been hit with a second investor lawsuit alleging the company and its chief executive made misleading statements about a line of products that inflated the value of company securities.
Harold Wallach, of Cliffside, N.J. sued the Newport Beach-based company in federal court in Santa Ana, claiming the company had overstated the attributes of technology that might be used to control the brightness of fluorescent lights and the marketability of products using that technology.
Wallach, who purchased $20,000 of the company's debentures, seeks to represent thousands of investors who purchased debentures from Oct. 3, 1994, through last July 2, said his lawyer, Robert Schacter of New York. Schacter said Wallach purchased 20 bonds, each with a $1,000 face value, for $1,100 each. The securities traded as high as $1,500, then sank to $960 when the company disclosed on July 2 that it couldn't meet requirements of major customers and the line of products would be discontinued pending "re-engineering".
Wallach's allegations echo those in another lawsuit filed in the same court last month. The earlier case seeks to represent a class of investors who bought stock during the same period.
The company, which designs, makes and markets other electrical and safety equipment, denies allegations in both suits. Richard V. Plat, executive vice president, attributed the decline in security values to a falloff in sales and earnings in a separate division that sells equipment to semiconductor manufacturing and electronics assembly industries.