New York, NY: (Oct-07-07) A securities class action lawsuit was filed by shareholders against DHB Armor, alleging that the past fraudulent operation of the company caused the stock to decline by $140 million. In question was a federal investigation into whether the former head of DHB Armor had the company supplement his lavish lifestyle and support some members of his family. The suit involved a probe into David Brooks' possible misuse of funds of DHB, which manufactured most of the body armor for US soldiers in Iraq and Afghanistan. Allegations included that Brooks or his family received cash or a number of perks from the company. Owing to reports that Brooks misappropriated millions of the company's money, shareholders claimed that the company was operated in a fraudulent manor.
As part of a settlement reached, shareholders would receive about $49 million. Sources said part of the impetus for the large settlement was fear of government action against the company. Company officials stated that the company is now profitable under a new management after Brooks' ouster from management. [NEWSDAY: DHB FRAUD]