b'use of a percentage of completion (POC) method ofexpected to restate its FY08 through FY13 financial accounting. In restating its results, Toshiba reduced itsresults, including reducing its operating income by total reported pre-tax profits for the years 2008 through151.8 billion. Toshiba also noted the IICs findings that 2014 by roughly a third and restated its shareholder equity,pointed to the involvement of top management and eliminating $9.9. billion in equity value. The restatementannounced the resignation of nine senior executives followed a months-long investigation by the Financialrelated to the substantial amount of inappropriate Services Agency (FSA) and Securities Exchange andaccounting over a long period of time. On August Surveillance Commission (SESC) of Japan which began8, 2015, Toshiba announced the formation of a on February 12, 2015 when Toshiba received an order forManagement Revitalization Committee to address inspection of Toshiba accounting methods.reform to its governance and internal controls.On April 3, 2015, Toshiba issued a press releaseOn September 17, 2015, following its September 7 announcing the establishment of a Specialrestatement of six years of financials, Toshiba issued a Investigation Committee (SIC) to investigate Toshibaspress release announcing the formation of an Executive use of POC accounting. The SIC was comprised ofLiability Investigation Committee (ELIC) to investigate Toshibas chairman, a member of its Audit Committee,potential wrongdoing related to the inappropriate one member each from its legal and audit departments,accounting practices at Toshiba and senior executives one outside lawyer, and one outside auditor. Afterinvolvement. Following the announcement, Toshiba the SIC identified improper use of POC accounting,stock price declined more than 40%, constituting a loss Toshiba announced in a press release on May 8, 2015of $7.6 billion in market capitalization.that the SIC would be re-formed as an IndependentOn November 7, 2015, Toshiba announced it had Investigation Committee (IIC) consisting entirely ofinvestigated 98 individuals and filed suit against outside independent experts and that the investigationfive former executives on November 10, 2015 as had expanded to include other accounting areaswell as announcing it would discipline 26 additional beyond POC accounting involving several Toshibamanagement employees referenced in the IIC as being infrastructure projects and could extend farther backsuspected of involvement in the improper accounting. in time than 2013. Toshiba also announced it would be withdrawing its FY14 earnings guidance and cancellingInvestors filed a putative class action against Toshiba payment of its FY14 dividend. Following these pressand two of its executives alleging violations of releases, Toshibas stock declined 16.6%.Sections 10(b) and 20(a) of the 1934 Act and Rule 10b-5 On May 13, 2015, Toshiba announced it would bepromulgated thereunder. The case was brought on restating its FY11 to FY13 financial results to reducebehalf of a class of all persons who acquired American operating income by 50 billion (approximatelyDepository Shares or Receipts (ADRs) from Toshiba $420 million) as a result of the improper accountingduring the class period, and alleged that class members methods, cautioning this reduction was only thehad acquired Toshiba ADRs in reliance upon the truth current expected amount which could change pendingand accuracy of Toshibas financial statements and completion of the IIC investigation. Throughout May andsuffered economic loss when the companys fraud June 2015, Toshiba issued press releases expandingwas revealed. The complaint also included a claim on the scope of the IIC investigation and announcingbehalf of the ADR class and a class of all citizens and preliminary results of that investigation.residents of the United States who otherwise acquired shares of Toshiba common stock during the Class On July 20 and 21, 2015, Toshiba issued press releasesPeriod based on alleged violations of the Financial announcing it received the IIC report and summarizingInstruments and Exchange Act of Japan (JFIEA), in Japanese the report conclusions, noting Toshibaclaiming that Toshibas material false information and 11'