Kehoe Law Firm, P.C. reports that on May 10, 2018, a class action lawsuit was filed against InnerWorkings, Inc. (NASDAQ:INWK) and certain of its officers in United States District Court, Central District of California, on behalf of a class of investors who purchased, or otherwise acquired, the securities of InnerWorkings between August 11, 2015 and May 7, 2018, both dates inclusive (the “Class Period”).
The class action complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (i) InnerWorkings’ financial statements for the years ending December 31, 2017, 2016, and 2015, as well as all interim periods, contained errors that required restating; and (ii) as a result, InnerWorkings’ financial statements were materially false and misleading at all relevant times.
The class action seeks to recover damages caused by the Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Investors Who Purchased the Securities of Innerworkings Between August 11, 2015 and May 7, 2018 Are Encouraged to Contact Kehoe Law Firm, P.C. To Discuss the Class Action Lawsuit and Their Potential Legal Options. Investors Who Purchased the Stock of InnerWorkings Have Until July 9, 2018 To Seek Appointment as Lead Plaintiff.
InnerWorkings Files Form 8-K “Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review”
On May 7, 2018, InnerWorkings reported in a Form 8-K filing that its Audit Committee of the Board of Directors
. . . concluded that [InnerWorkings] will postpone the release of its first quarter 2018 financial results and conference call due to errors in [its] historical financial statements identified by [InnerWorkings] during the course of its first quarter financial reporting close process. The Company will be restating its financial statements for the years ended December 31, 2017, 2016, and 2015, and all interim periods within those years. Accordingly, investors should no longer rely upon the Company’s previously issued financial statements for these periods, any earnings releases or other communications relating to these periods, or projections or estimates for any future periods. This decision was reached after discussions with the Company’s senior management and outside advisors. (Emphasis added)
InnerWorkings’ Form 8-K filing also stated that
[b]ecause of the Company’s ongoing review of certain adjustments, [InnerWorkings] requires additional time to complete an analysis of all necessary adjustments and to determine the extent of the corrections that may be required to its historical financial statements. Based on its preliminary assessment, [InnerWorkings] estimates the aggregate impact of these corrections on income before income taxes as follows:
- For the year ended December 31, 2017, a decrease in income before income taxes of $2.5 – $4.5 million;
- For the year ended December 31, 2016, a decrease in income before income taxes of $1.5 – $2.5 million; and
- For the year ended December 31, 2015, an increase in income before income taxes of $0.5 – $1.5 million
[InnerWorkings] has previously concluded in certain of the periods requiring restatement that its controls over financial reporting were effective. In certain of the other periods, including as of December 31, 2017, the Company previously concluded that its controls over financial reporting were ineffective due to material weaknesses in certain internal controls. As a result of the material weakness relating to the restatement described above, the Company has now concluded that its controls over financial reporting were ineffective in all of the aforementioned periods. Accordingly, the Company will restate its disclosures for the affected periods to include the identification of a material weakness related to its restatement. The Company is actively engaged in remediating the material weaknesses. (Emphasis added)
INWK Stock Drops on the News of the Company’s Historical Financial Statement Errors
On the news of INWK’s delay in reporting its Q1 2018 financials and the need to restate its financials, the share price of InnerWorkings fell $.062, or 6.4%, to close at $9.06 on May 8, 2018.
Investors and Shareholders of InnerWorkings
If you purchased, or otherwise acquired, the securities of InnerWorkings during the Class Period and have questions or concerns about the class action lawsuit or your potential legal rights, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Investors who purchased InnerWorkings’ securities during the Class Period and suffered damages have until July 9, 2018 to file a motion with the Court to seek appointment as lead plaintiff. Please note that no class has been certified in the above action, and until a class is certified, you are not represented by counsel unless you retain an attorney of your choice. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may serve together as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.