DURHAM …Â The board of directors of Cree (Nasdaq: CREE) has formed a special committee of independent directors to investigate recent allegations of securities violations made against the semiconductor company. The committee has hired an independent counsel to assist in the investigation.
Cree co-founder Eric Hunter filed suit against the company on June 12, alleging that executives have manipulated its finances for several years to inflate the stock price. Hunter is no longer involved with the company, but his brother Neal is chairman.
Since the allegations, the company has been hit with nine class-action lawsuits from stockholders claiming that they were misled by Cree’s statements surrounding a secondary stock offering three years ago and the company’s supply contracts with different customers.
The board of directors also has established a committee of non-management directors to handle the litigation.
Cree’s stock continues to slide amid the controversy, closing Tuesday at $15.99 a share, down 1.6 percent.
Separately, Adams Harkness reiterated its “buy” rating on Cree stock Tuesday, putting a 12-month target price of $25 a share on it.