Apr 28, 2020 | Securities Class Action Archive
Kehoe Law Firm, P.C. Investigating Slack Technologies For Potential Breach of Fiduciary Duty Claims
Kehoe Law Firm, P.C. is making investors aware that on April 27, 2020, a shareholder derivative action was filed in United States District Court for the District of Delaware seeking to remedy alleged wrongdoing committed by certain directors and officers of Slack Technologies (“Slack Technologies” or the “Company”) (NYSE: WORK) from June 20, 2019 through the present (the “Relevant Period”) based on misleading statements and omissions made in connection with Slack Technologies’ June 2019 initial direct stock offering (“the Offering”), the subsequent failure to correct them, and insider sales made in connection with and after the Offering.
According to the complaint:
The Individual Defendants breached their fiduciary duties by personally making and/or causing the Company to make a series of materially false and misleading statements in the Offering Documents regarding the Company’s business, operations, and prospects. Specifically, the Individual Defendants willfully or recklessly made and/or caused the Company to make false and misleading statements that failed to disclose, inter alia, that: (1) the Company’s Slack App contained certain vulnerabilities that had already caused significant service outages and other disruptions in the past; (2) the Company had already failed to meet its promised 99.99% uptime guarantee during seven out of the twelve months in 2018, and would be unable to meet its 99.99% uptime guarantee in the future; (3) the Company’s SLAs [“service level agreements”] were highly punitive and unusual for the industry, and during service disruptions provided credits to users worth approximately 100 times the value of lost service, even to users who did not experience the disruptions or request service credits; (4) as a result of the foregoing, the Company’s financial results and overall prospects would be heavily impacted; and (5) the Company failed to maintain internal controls. As a result of the foregoing, the Company’s public statements were materially false and misleading.
After the Offering, the Individual Defendants failed to correct these false and misleading statements and omissions of material fact, rendering them personally liable to the Company for breaching their fiduciary duties.
Also in breach of their fiduciary duties, the Individual Defendants failed to maintain internal controls.
Furthermore, not only did six of the Individual Defendants breach their fiduciary duties by engaging in lucrative insider sales in connection with the Offering while the price of the Company’s common stock was artificially inflated due to the false and misleading statements of material fact, but three of the Individual Defendants continued to engage in insider transactions after the Offering, while the price of the Company’s stock remained artificially inflated, and before the truth was exposed. In total, the Individual Defendants collectively sold over 14.7 million shares of Company stock during the Relevant Period, obtaining proceeds of over $579 million. [Emphasis added.]
Slack Technologies investors who have owned their shares continuously since June 2019 are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to discuss the investigation or potential legal claims.
Apr 27, 2020 | Securities Class Action Archive
Fluor Corporation Shareholder Derivative Action Filed – Breach of Fiduciary Duties, Unjust Enrichment, and Securities Exchange Act Violations Alleged – Kehoe Law Firm, P.C. Investigating Breach of Fiduciary Duty Claims
Kehoe Law Firm, P.C. is making investors aware that on April 10, 2020, a shareholder derivative action was filed in United States District Court for the District of Delaware seeking to remedy the individual Fluor Corporation Defendants’ breach of fiduciary duties, unjust enrichment, and violations of Section 10(b) of the Securities Exchange Act of 1934 that occurred between November 2, 2017 to the present (the “Relevant Period”) and which have caused substantial harm to Fluor Corporation (NYSE: FLR).
According to the complaint, the Fluor Corporation Defendants,
[t]hroughout the Relevant Period, . . . inflated the Company’s revenue and earnings by improperly recognizing revenue on sixteen (16) separate projects. Once awarded a contract to perform work on a project, the Company would routinely submit ‘change forms’ to its clients in which the Company would request additional funds to cover its cost overruns that resulted from ‘unforeseen circumstances,’ funds which the client was not contractually obligated to pay. When the Company determined, through its own assessment, that it was ‘likely’ that the client would accept their change order, the Company would book the additional revenue. This was contrary to the assurances to the market that the Company would only recognize revenue from its submission of these change orders if it determined that ‘recovery of incurred costs is probable and the amounts can be reliably estimated.’
Defendants had been secretly utilizing change orders, among other tactics, to improperly inflate the Company’s revenue and earnings by recognizing additional revenue on its contracts despite having no reasonable basis to do so.
Have You Held Fluor Corporation Stock Continuously Since November 2017?
Fluor Corporation investors who have owned FLR shares continuously since November 2017 are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to discuss potential legal claims.
Apr 22, 2020 | Securities Class Action Archive
Kehoe Law Firm, P.C. Investigating Mattel, Inc. For Potential Breach of Fiduciary Duty Claims
Kehoe Law Firm, P.C. is investigating Mattel, Inc. (“Mattel” or the “Company”) (NASDAQ: MAT) for potential breach of fiduciary duty claims. On April 9, 2020, a shareholder derivative action was filed in United States District Court for the District of Delaware seeking to remedy wrongdoing allegedly committed by Mattel’s directors and officers from August 2, 2017 through August 8, 2019 (the “Relevant Period”).
According to the complaint:
During the Relevant Period, the Individual Defendants breached their fiduciary duties by causing the Company to engage in improper accounting practices, and by personally making and/or causing the Company to make a series of materially false and/or misleading statements regarding the Company’s business, operations, prospects, and regulatory compliance. Specifically, the Individual Defendants willfully or recklessly made and/or caused the Company to make false and misleading statements that failed to disclose that: (1) Mattel did not maintain effective internal controls over financial reporting; (2) the Company’s net loss during the third fiscal quarter of 2017 was understated by $109 million; (3) the Company’s senior accounting team conspired with PwC to cover up this understatement by overstating the Company’s net loss during the fourth fiscal quarter of 2017 by $109 million; and (4) as a result of these misstatements, the Company’s financial statements were inaccurate and were not in compliance with GAAP. As a result of the foregoing, the Company’s public statements were materially false and misleading at all relevant times and the Company would ultimately be forced to cancel its $250 million Notes Offering and restate certain of its financial statements. [Emphasis added.]
Have You Owned Mattel Shares Continuously Since August 2017?
Mattel investors who have owned MAT shares continuously since August 2017 are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to discuss the Mattel investigation or potential legal claims.
Apr 17, 2020 | Securities Class Action Archive
Purchasers of iQIYI American Depositary Shares (“ADS”) Between March 29, 2018 and April 7, 2020 Are Encouraged To Contact Kehoe Law Firm, P.C. To Discuss Potential Legal Claims – Class Action Filed On Behalf of iQIYI ADS Purchasers
Kehoe Law Firm, P.C. is making consumers aware that a class action lawsuit has been filed against iQIYI, Inc. (“iQIYI” or the “Company”) (NASDAQ: IQ) in United States District Court, Eastern District of New York, on behalf of individuals or entities who purchased, or otherwise acquired, iQIYI’s securities between March 29, 2018 and April 7, 2020, both dates inclusive (the “Class Period”). The class action is seeking to recover compensable damages caused by the iQIYI Defendants’ alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder.
According to the class action complaint, the iQIYI Defendants issued materially false and/or misleading, because they misrepresented and failed to disclose adverse facts pertaining to the Company’s business, operational and financial results, which were known to Defendants or recklessly disregarded by them. Specifically, the iQIYI Defendants made false and/or misleading statements and/or failed to disclose that: (1) iQIYI inflated its revenue figures; (2) iQIYI inflated its user numbers; (3) iQIYI inflated its expenses to cover up other fraud; and (4) as a result, Defendants’ public statements were materially false and misleading at all relevant times.
Investors who purchased, or otherwise acquired, IQ American Depositary Shares during the Class Period and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss the class action lawsuit or potential legal claims.
Apr 15, 2020 | Securities Class Action Archive
GSX Techedu Inc. Reportedly Overstating Revenue – GSX Techedu Investors Who Have Suffered Losses Greater Than $50,000 Encouraged To Contact Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is investigating potential securities claims on behalf of investors of the American Depositary Receipts (“ADRs”) of GSX Techedu Inc. (“GSX Techedu” or the “Company”) (NYSE: GSX), as a result of allegations that GSX Techedu may have issued materially misleading business information to the investing public.
On April 14, 2020, Citron Research issued a report (“GSX Techedu Inc – The Most Blatant Chines Stock Fraud since 2011“) which, among other things, stated that “GSX Techedu Inc is overstating revenue by up to 70% and should immediately halt trading and launch an internal investigation.”
Citron Research reported the following “takeaways from Citron’s extensive due diligence”:
After tracking >20% of available GSX classes, Citron estimates that 2019 revenue was overstated by 70%
[Citron’s] data indicates that most students are not from lower-tier cities, as GSX claims, when trying to explain how the company can grow so quickly when most Chinese parents in Tier 1 and 2 cities have never heard of them
Wuhan and the surrounding area make up almost 50% of the student composition in Q1 2020, which further supports [Citron’s] thesis that a large % of revenues are fudged given the large number of free classes offered to students of Wuhan during the Covid-19 crisis and, just as importantly, implies that GSX couldn’t have a strong diversified student base to begin with, and that the previous sales revenues are largely exaggerated
Duplicated classes (i.e., counted more than once) could be one way that revenues are inflated
GSX management has deflected criticism with unconvincing explanations that show a greater interest in protecting their stock price than operational integrity, and their filings are riddled with suspicious transactions [Emphasis added.]
Citron Research, “[a]s a result of [its] investigation . . . calls on the internal audit team at GSX to look into student enrollment numbers and revenue more closely. [Citron’s] research suggests a huge discrepancy between reported figures and reality.” [Emphasis added.]
On this news, GSX’s ADR share price fell sharply during intra-day trading on unusually high trading volume, thereby damaging investors.
GSX Techedu investors who purchased, or otherwise acquired, GSX American Depositary Receipts and suffered losses greater than $50,000 are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss potential legal claims.
Apr 9, 2020 | Securities Class Action Archive
Class Action Filed Against eHealth, Inc. On Behalf of EHTH Investors Who Purchased, Or Otherwise Acquired, eHealth Common Stock Between March 19, 2018 and April 7, 2020, Both Dates Inclusive – EHTH Investors Who Suffered Losses Encouraged To Contact Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is making investors aware that on April 8, 2020, a class action lawsuit was filed against eHealth, Inc. (“eHealth” or the “Company”) (NASDAQ: EHTH) on behalf all investors who purchased, or otherwise acquired, eHealth common stock between March 19, 2018 and April 7, 2020, inclusive (the “Class Period”), seeking to recover damages caused by the eHealth Defendants’ alleged violations of the federal securities laws and to pursue remedies under §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10b-5.
According to the complaint the eHealth Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts to investors. Specifically, the eHealth Defendants misrepresented and/or failed to disclose to investors: (1) its highly aggressive accounting and modeling assumptions; (2) its skyrocketing rate of member churn, resulting from eHealth’s pursuit of low quality, loss-making growth; (3) its reliance on direct response television advertising, which attracts an unprofitable, high churn enrollee; and (4) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
The complaint alleges that
[b]efore the markets opened on April 8, 2020, analyst Muddy Waters Research published a report in which it wrote that ‘EHTH’s highly aggressive accounting masks what we believe is a significantly unprofitable business.'[] Muddy Waters continued that ‘EHTH’s persistence assumptions in its LTV2[] model seem highly aggressive when compared to reality,’ that ‘[a]fter ASC 606 went into effect, member churn immediately skyrocketed,’ and that ‘EHTH is pursuing low quality, lossmaking growth while its LTVs are based on lower churn, pre-growth cohorts.’ Furthermore, Muddy Waters concluded that ‘the key driver of growth since 2018 has been EHTH’s reliance on Direct Response television advertising, which attracts an unprofitable, high churn enrollee. To generate this unprofitable growth, EHTH has been incinerating cash, which we expect it to continue to do until this value destruction slows down or stops. EHTH management is, in our view, running a massive stock promotion.‘
On this news, the stock plummeted from its April 7, 2020 closing price of $116.02 per share to an April 8, 2020 closing price of $103.20 per share, a one day drop of $12.82 or approximately 12%. [Emphasis in original and added.]
eHelath investors who purchased, or otherwise acquired, EHTH securities during the Class Period and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], to discuss the class action lawsuit or potential legal claims.
