Kehoe Law Firm, P.C. is investigating Global Eagle Entertainment Inc. (“Global Eagle” or “Company”) for possible violations of the federal securities law. On February 21, 2017, before the market opened for trading, Global Eagle (NASDAQ: ENT) announced that its CEO, David Davis, and CFO, Tom Severson, had resigned and that the Company expects to delay filing its 2016 Annual Report with the U.S. Securities and Exchange Commission. On this news, Global Eagle’s share price fell $1.74, or 27.97%, to close at $4.48 on February 21, 2017.
Global Eagle’s Announcement
Global Eagle offered few details concerning the reason for the departure of the CEO and CFO. Regarding the filing delay, the Company claimed it was due to “increased size and complexity” after its acquisition of Emerging Markets Communications, as well as “its need to transition the finance department after the prior CFO’s departure and its need to complete additional financial-closing procedures associated with the Company’s material weaknesses in internal control over its financial reporting.”
Evidence of Accounting Problems?
As The Motley Fool reported in a February 21, 2017 article:
The sudden departure of the CEO and CFO, which could be evidence of accounting problems, prompted an investigation from a shareholder rights law firm[,] . . . which said it was looking into possible violations of federal securities laws by Global Eagle.
Global Eagle also said it would file its 10-K after the SEC March 16 deadline, noting among other factors that it needs “to complete additional financial closing procedures associated with the Company’s material weaknesses in internal control over its financial reporting” (emphasis added). Such a statement seems to indicate accounting inconsistencies, which could force the company to restate past financial statements or incur fines from the SEC.
Class Action Lawsuit Filed
On February 23, 2017, a class action lawsuit was filed in the United States District Court for the Central District of California on behalf of those who purchased Global Eagle common stock between July 27, 2016 and February 17, 2017 (the “Class Period”). The Complaint alleges that Global Eagle and certain executive officers violated various provisions of the federal securities laws during the Class Period.
What if I’m a Global Eagle Shareholder?
Those who purchased Global Eagle shares during the Class Period, and who are interested in learning more about our investigation, are encouraged to contact the Kehoe Law Firm, P.C. by completing the form on the right or by calling Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or by sending an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of the Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.