Investors Obtain $95 Million in VeriFone Securities Class ActionIn February 2014, United States District Court Judge Edward M. Chen approved a $95 million settlement in, one of the largest securities class action settlements ever achieved in the Northern District of California.Led by lead plaintiff National Elevator Industry Pension Fund and their counsel at Robbins Geller and O’Donoghue & O’Donoghue LLP, the settlement was the result of over seven years of tenacious litigation, including lead plaintiff’s successful efforts to reverse the district court’s dismissal of the action with prejudice.The action was brought on behalf of purchasers of VeriFone stock between August 31, 2006 and April 1, 2008. VeriFone, based in San Jose, California, designs, manufactures, and sells electronic payment devices that enable acceptance and processing of electronic and point-of-sale payments for goods and services. During the class period, VeriFone’s shares were dual-listed on both the New York Stock Exchange and the Tel Aviv Stock Exchange (the “TASE”).The complaint alleged that during the class period, VeriFone issued financial statements that were materially false and misleading and not prepared in accordance with GAAP because VeriFone (a) recorded millions of dollars of intercompany in-transit inventory that did not exist; (b) double-booked millions of dollars of manufacturing and distribution overhead costs; (c) failed to eliminate millions of dollars in intercompany profit in inventory; (d) improperly capitalized overhead into inventory; and (e) failed to write off excess and obsolete inventory.As a result of this conduct, VeriFone was able to report significant increases in gross margins during the class period, which defendants told investors were the most important measure of the company’s financial performance – indeed, “the ultimate barometer of the operational Excellence of this business.” Defendants boasted that the better-than-expected gross margins were the results of “supply chain efficiencies in Israel that we never experienced before, ” “procurement synergies, ” “better commercial execution, ” and declines in fixed costs that provided VeriFone with a “structural gross margin advantage” and assured them the reported gross margins were accurate, stating that “we have tremendous transparency, financial transparency into the true cost of manufacturing and all the little nuanced items that roll up into that.”