Pomerantz Appointed Lead Counsel in Franklin Wireless Securities Litigation

On September 15, 2021, U.S. District Judge Anthony J. Battaglia of the Southern District of California appointed Pomerantz LLP as Lead Counsel on behalf of Gergely Csaba, the Lead Plaintiff in Ali v. Franklin Wireless Corp., 21-cv-687 (S.D. Cal.), a securities action brought on behalf of a class of defrauded investors concerning allegations related to the safety and commercial sustainability of Franklin Wireless Corp.’s (“Franklin Wireless” or the “Company”) Jetpack Hotspot mobile device.

Franklin Wireless is a provider of hardware and software products that support wireless connectivity for home, business, education and enterprise customers, including routers, modems and mobile hotspots such as Jetpack Hotspot mobile devices. The company imported Jetpack Hotspot devices and sold them in various stores, including Verizon Wireless stores and online at www.verizon.com, from April 2017 through March 2021.

Allegations against Franklin Wireless include that: (i) lithium-ion batteries in Jetpack Hotspot devices were prone to overheating, representing a fire hazard; (ii) as a result, it was likely that the Company’s customers, including Verizon Wireless, would issue a recall for the Jetpack Hotspot devices; and (iii) accordingly, Franklin Wireless’s proceeds from its sales to these customers were, at least in part, unsustainable and prone to future offset from product recalls.

On April 1, 2021, Franklin Wireless issued a press release announcing that it “has been notified of reports of battery issues in some of its wireless hotspot devices” and “is working with its battery and device manufacturing partners and carrier customer to determine the cause and extent of the problem.”

Then, on April 9, 2021, Franklin Wireless issued a press release announcing that the Company “has been notified that Verizon Wireless has issued a voluntary recall of its Jetpack Hotspot devices imported by Franklin.”  Verizon Wireless’s recall was prompted by reports of the lithium-ion batteries in the devices overheating, posing a fire hazard.

On this news, Franklin Wireless’s stock price fell $4.07 per share, or 23.49%, to close at $13.26 per share on April 9, 2021.