July 25, 2016 - The case was voluntarily dismissed.

January 22, 2016 (Shareholders Foundation) - An investor in shares of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by Tower Semiconductor Ltd. in connection with certain allegedly false and misleading statements made between April 30, 2012 and January 13, 2016.

According to the complaint the plaintiff alleges on behalf of purchasers of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) common shares between April 30, 2012 and January 13, 2016, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between April 30, 2012 and January 13, 2016 Defendants issued allegedly false and misleading statements to investors and/or failed to disclose that the value of net tangible assets of the acquisition of a fabrication facility from Micron Technology Inc. was artificially inflated, that the value of net tangible assets of the acquisition of 51% of TowerJazz Panasonic Semiconductor Co., Ltd. from Panasonic Corporation was artificially inflated, that Tower Semiconductor’s Series F Debentures were incorrectly accounted for to understate debt, and that as a result, Defendants’ statements about Tower Semiconductor’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times. The suit alleges that when the truth of these allegations entered the market through a research report issued by Spruce Point Capital Management, the value to Tower Semiconductor securities dropped, damaging investors.

Tower Semiconductor Ltd. reported that its annual total Revenue rose from $505.01 million in 2013 to $828.01 million in 2014 and that its Net Loss of $107.66 million in 2013 turned into a Net Income of $4.26 million in 2014. Shares of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) grew from $3.95 per share in late 2013 to as high as $18.29 per share in March 2015.

On January 14, 2016, Spruce Point Capital Management published a report on Tower Semiconductor Ltd entitled Leaning Tower of Losses. Among things, Spruce Point Capital Management alleged that Evidence Suggesting [a] Brazen Accounting Scheme to Forestall [a] Bankruptcy Threat. Per Spruce Point's report: Tower may have heavily promoted [a joint venture deal with] Panasonic . . . to inflate its stock, and convert its Series F debt to equity to relieve its debt burden. We have evidence to suggest Tower inflated the value of the [joint venture's] assets from approx.. $100m to $300m in order to inflate a bargain purchase gain to bolster its equity. Furthermore, Tower has engaged in other questionable accounting maneuvers to give the appearance of strong Non-GAAP gross margins, profitability, and free cash flow such as: 1) Shifting COGS expenses to R&D and SG&A; 2) Changing the presentation of capex from gross to net ; 3) Extending the useful life of its assets to reducing depreciation expense; 4) Excluding depreciation and amortization to present Non-GAAP results (not industry standard); 5) Haircutting its convertible and bank debt by inappropriately interpreting the accounting guidance.

Shares of Tower Semiconductor Ltd. (USA) (NASDAQ:TSEM) declined on January 14, 2016 to as low as $10.66 per share.

On January 22, 2016, NASDAQ:TSEM shares closed at $11.99 per share.