Cemtrex Inc. has agreed to reform its corporate governance policies and to make $725,000 in payments to settle several securities lawsuits filed in federal and state courts, the company said.
Cemtrex, a Farmingdale maker of technology products, including a SmartDesk that incorporates a computer that responds to hand gestures, denied wrongdoing.
In a statement issued Wednesday, the company said its insurer would pay $625,000 to the plaintiffs and $100,000 to the plaintiffs' attorneys.
"After carefully evaluating the merits of trying the case versus settling it, we chose the latter as any continued litigation of the actions would be protracted, burdensome and expensive for the company," Saagar Govil, Cemtrex's chief executive, said in a statement.
In response to an email inquiring about the company's changes in corporate governance, Govil said Monday: "We have not disclosed those publicly, so we cannot provide that information at this time unfortunately."
Calls to two of the lawyers for plaintiffs, Shannon L Hopkins of Stamford, Connecticut, and Timothy W. Brown of Oyster Bay, were not returned.
Shares of Cemtrex fell 4.8 percent Monday to close at $1.19, below the almost $3 level 12 months ago.
The settlement, which is subject to court approval, covers securities class action lawsuits filed in U.S. District Court in the Eastern District of New York and in state Supreme Court in Suffolk County.
An amended 125-page complaint, filed in U.S. District Court in May, charged that Saagar Govil, his father, Arun Govil, a director of Cemtrex, and Renato Dela Rama, the company's chief financial officer, skirted "mandatory reporting" of stock transactions under federal securities laws.
The complaint also said that Cemtrex filed financial reports "representing its ownership" of a subsidiary called Cemtrex India Private Ltd. In reality, Arun Govil had a controlling interest of that business, the complaint said.
In March, Cemtrex agreed to acquire a 46 percent stake in Vicon Industries Inc., a Hauppauge-based maker of video surveillance equipment, and Saagar Govil also became CEO of that company.