Mar 5, 2018 | Securities Class Action Archive
WageWorks, Inc. Files Notification of Late Filing – WAGE Concludes It Has Material Weakness in Its Internal Control Over Financial Reporting
On March 1, 2018, WageWorks, Inc. (NYSE: WAGE), “a leader in administering Consumer-Directed Benefits,” issued an announcement disclosing that WAGE “is delaying its Annual Report on Form 10K for the year ended December 31, 2017 and its financial results and associated conference call for the fourth quarter of 2017.”
On this news, WAGE Stock Dropped $9.75, or more than 18%, to close at $42.70 per share on March 1, 2018.
Copyright © by StockCharts.com Inc., Redmond, WA. All rights reserved. http://stockcharts.com/
WAGE’s Notification of Late Filing (SEC Form 12B-25)
On March 2, 2018, WageWorks filed a Notification of Late Filing with the SEC, which stated that WAGE
. . . is unable, without unreasonable effort or expense, to file its annual report on Form 10-K for the year ended December 31, 2017 within the prescribed time period because it requires additional time to complete its financial statements and its assessment of [WAGE’s] internal control over financial reporting; accordingly, [WAGE’s] independent registered accounting firm, KPMG LLP (“KPMG”), has not yet completed its audits of [WAGE’s] financial statements and [WAGE’s] internal control over financial reporting as of December 31, 2017. [WageWorks] does not currently expect to file its Annual Report on Form 10-K by the prescribed due date allowed pursuant to Rule 12b-25.
[WageWorks] has concluded that it has a material weakness in its internal control over financial reporting as of December 31, 2017 related to managing change and assessing risk in the areas of non-routine and complex transactions. As a result of the material weakness, [WageWorks] has concluded that its internal control over financial reporting and disclosure controls and procedures were ineffective as of December 31, 2017. [WageWorks] is in the process of designing processes and controls to address this material weakness. [WageWorks] intends to disclose more detailed description of this weakness, including a plan for remediating this deficiency, in the 2017 Form 10-K.
The Audit Committee of [WAGE’s] Board of Directors is conducting an independent investigation of [WAGE’s] internal control over financial reporting in fiscal 2016 and 2017. Among other matters, the investigation consists of a review of certain issues, including revenue recognition, related to the accounting for a government contract during fiscal 2016 and associated issues with whether there was an open flow of information and appropriate tone at the top for an effective control environment.
Additionally, the Audit Committee investigation of accounting and internal control matters is ongoing and may ultimately result in the identification of other accounting issues, further material weaknesses, and/or require the restatement of [WAGE’s] financial statements for previous periods. (Emphasis added)
WageWorks Investors & Shareholders
If you purchased, or otherwise acquired, WAGE stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Mar 2, 2018 | Securities Class Action Archive
Class Action Lawsuit Filed on Behalf of Shareholders and Investors of Ubiquiti Networks, Inc. Who Purchased UBNT Common Stock Between May 9, 2013 and February 20, 2018, Both Dates Inclusive
Kehoe Law Firm, P.C. is investigating securities claims on behalf of shareholders of Ubiquiti Networks and reports that a class action lawsuit has been filed on behalf of shareholders who purchased the securities of Ubiquiti Networks, Inc. (NASDAQ: UBNT) between May 9, 2013 and February 20, 2018, both dates inclusive (the “Class Period”). The class action lawsuit, which was filed in United States District Court, Southern District of New York, seeks to recover damages for investors of Ubiquiti Networks under the federal securities laws.
Ubiquiti shareholders who wish to serve as lead plaintiff MUST move the Court to seek appointment as lead plaintiff no later than April 23, 2018.
During the class period, the Ubiquiti defendants, according to the class action lawsuit, made materially false and/or misleading statements and/or failed to disclose that that the size of Ubiquiti’s purported user community was drastically overstated; Ubiquiti had exaggerated its publicly reported accounts receivable; and as a result, Ubiquiti’s publicly-disseminated financial statements were materially false and misleading. When the true details entered the market, the class action lawsuit claims that UBNT investors suffered damages.
According to the UBNT class action complaint:
Ubiquiti Networks is a company whith “. . . develops technology platforms for high-capacity distributed Internet access, unified information technology, and next-generation consumer electronics for home and personal use.” [Ubiquiti Networks] does not employ a traditional sales force. Instead, it purports to ‘drive[] brand awareness largely through the company’s user community where customers can interface directly with R&D, marketing, and support.’ [Ubiquiti Networks] calls this user community the ‘Ubiquiti Community.’”
Information previously disclosed to the market revealed that the size of the “Ubiquiti Community” was grossly exaggerated, and that the Company has engaged in fraudulent accounting practices and financial reporting.
On February 20, 2018, Ubiquiti filed a [F]orm 8-K with the Securities and Exchange Commission that said, in material part:
On February 13, 2018, the Securities and Exchange Commission . . . issued subpoenas to Ubiquiti Networks, Inc. . . . and certain of [Ubiquiti’s] officers requesting documents and information relating to a range of topics, including metrics relating to the Ubiquiti Community, accounting practices, financial information, auditors, international trade practices, and relationships with distributors and various other third parties.
On the news of the SEC subpoenas, Ubiquiti’s share price fell more than 25 percent, from $74.04 at the close of the prior trading day, to close at $55.28 on February 20, 2018. (Emphasis added)
Copyright © by StockCharts.com Inc., Redmond, WA. All rights reserved. http://stockcharts.com/
The class action complaint also stated that
[p]rior to disclosure of the SEC’s . . . subpoenas, there was a partial corrective disclosure on September 18, 2017. On that day Citron Research . . . issued a report entitled “Cintron Exposes Ubiquiti Networks,” . . . in which Citron [Research] detailed a series of “alarming red flags,” indicating that [Ubiquiti Networks] had been deceiving investors and was engaged in “corporate fraud,” including, among other things, that [Ubiquiti Networks] had been deceiving investors and was engaged in “corporate fraud,” including, among other things, that [Ubiquiti] had misrepresented the size of its purported “Ubiquiti Community”, as well as its levels of accounts receivable, among other things.
Ubiquiti Networks, Inc. Shareholders and Investors
If you purchased, or otherwise acquired, UBNT stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
PLEASE NOTE: NO CLASS HAS BEEN CERTIFIED IN THE ABOVE ACTION. UNTIL A CLASS IS CERTIFIED, YOU ARE NOT REPRESENTED BY COUNSEL UNLESS YOU RETAIN AN ATTORNEY OF YOUR CHOICE. YOU MAY ALSO REMAIN AN ABSENT CLASS MEMBER AND NOT TAKE ANY ACTION AT THIS TIME.
Feb 27, 2018 | Securities Class Action Archive
Sorrento Therapeutics Announces That Its Unaudited Condensed Consolidated Financial Statements for The Three and Nine Months Ended September 30, 2017 Should No Longer Be Relied Upon
Kehoe Law Firm, P.C. is investigating claims on behalf of the investors of Sorrento Therapeutics, Inc. to determine whether Sorrento Therapeutics and certain of its officers or directors engaged in securities fraud or other unlawful business practices.
On February 26, 2018, post-market, Sorrento Therapeutics (NASDAQ:SRNE) announced that SRNE’s
. . . Audit Committee of the Board of Directors (the “Audit Committee”) of Sorrento Therapeutics, Inc. . . . after discussion with [Sorrento’s] independent registered public accounting firm, concluded that [Sorrento’s] unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2017 should no longer be relied upon as a result of the conclusion by the Audit Committee that an other-than-temporary impairment in value had occurred in [Sorrento’s] equity method investment in Immunotherapy NANTibody, LLC (“NANTibody”) for the three and nine months ended September 30, 2017. In February 2018, NANTibody notified [Sorrento Therapeutics] that in July 2017 NANTibody acquired assets from a party related to its 60% owner, NantCell, Inc., for approximately $90 million cash. As a result, [Sorrento Therapeutics] reassessed the recoverability of its equity method investment in NANTibody and, on February 26, 2018, [Sorrento] and Audit Committee concluded that a previously unrecorded other-than-temporary impairment in value had occurred in its equity method investment in NANTibody as of September 30, 2017. The resulting impact on [Sorrento’s] 40% equity interest in NANTibody is a $36.0 million impairment on equity method investment in [Sorrento’s] condensed consolidated statement of operations for the three and nine months ended September 30, 2017. This impairment expense will not result in cash expenditures in past or future periods.
[Sorrento Therapeutics] will restate its unaudited condensed consolidated financial statements and other financial information contained in its Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2017, filed with the Securities and Exchange Commission on November 9, 2017 (the “Form 10-Q”), to reflect the impact of the impairment in the value of [Sorrento’s] equity investment in NANTibody by filing an amendment to the Form 10-Q on or about February 26, 2018. (Emphasis added)
On this news, the stock price of Sorrento Therapeutics dropped during intraday trading on February 27, 2018, closing at $8.45, down 4.52% from SRNE’s previous close of $8.85.
Copyright © by StockCharts.com Inc., Redmond, WA. All rights reserved. http://stockcharts.com/
Sorrento Therapeutics Investors and Shareholders
If you purchased, or otherwise acquired, SRNE stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Feb 23, 2018 | Securities Class Action Archive
Seven Stars Cloud Group Cuts Guidance and Dismisses Its Independent Registered Public Accounting Firm
Kehoe Law Firm, P.C. announces that it is investigating whether Seven Stars Cloud Group, Inc. and certain of its officers or directors violated federal securities laws.
On February 22, 2018, post-market, Seven Stars Cloud Group announced that on February 16, 2018, the Audit Committee of the Board of Directors of Seven Stars Cloud Group, Inc., formerly known as Wecast Network, Inc., approved the dismissal of China-member firm of Grant Thornton International, Grant Thornton (“GT”), as Seven Stars Cloud Group’s (NASDAQ: SSC) independent registered public accounting firm.
According to SSC’s announcement:
[SSC’s] Audit Committee engaged GT in April 2017 as its independent registered public accounting firm. [SSC’s] prior independent registered public accounting firm that issued audit reports on [SSC’s] financial statements as of and for the fiscal years ended 2016 and 2015 did not include an adverse opinion or a disclaimer of opinion in those reports, and those reports were not qualified or modified as to uncertainty, audit scope, or accounting principles.
Since the commencement of GT’s engagement in April 2017 through February 16, 2018, there were no: (1) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with GT on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements if not resolved to their satisfaction would have caused them to make reference in connection with their opinion to the subject matter of the disagreement, or (2) reportable events requiring disclosures (as described in Item 304(a)(1)(v) of Regulation S-K), except that GT advised [SSC] of a material weakness in [SSC’s] internal control of financial reporting related to the design, documentation and implementation of effective internal controls over the review of the cash flow forecasts used in assessing the recoverability of licensed content. [Sevn Stars Cloud Group] has authorized GT to respond fully to inquiries of the successor accountant. (Emphasis added)
A letter from SSC’s former certifying accountant, GT, can be viewed by clicking GT letter.
Seven Stars Cloud Group announced on February 23, 2018 that “SSC now foresees full-year 2017 revenue to be in the range of $125 million – $144 million upon the anticipated timely completion of its 2017 audit by BF Borgers CPA PC . . ..” SSC stated that this revenue range “was short of the Company’s earlier and recent guidance,” as well as that “[u]nanticipated personnel issues that led to internal communication and internal administrative oversights that materialized during the Company’s 2017 fiscal year, resulted in what is anticipated to be 2017 revenue that is below prior and recent guidance expectations.” (Emphasis added)
On this news, shares of SSC were down more than 40% during intraday trading on February 23, 2018.
Copyright © by StockCharts.com Inc., Redmond, WA. All rights reserved. http://stockcharts.com/
Seven Stars Cloud Group, Inc. Shareholders and Investors
If you purchased, or otherwise acquired, SSC stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Feb 23, 2018 | Securities Class Action Archive
Individuals Who Purchased, or Otherwise Acquired, Obalon Securities Pursuant and/or Traceable to Obalon’s Registration Statement and Prospectus, Issued in Connection with Obalon’s Initial Public Offering On or About October 5, 2016, and/or On the Open Market Between October 5, 2016 and January 23, 2018, Both Dates Inclusive
Kehoe Law Firm, P.C. continues its investigation of Obalon Therapeutics and advises investors of Obalon Therapeutics (NASDAQ: OBLN) that on February 22, 2018, a class action lawsuit was filed against Obalon Therapeutics, Inc. and certain executives on behalf of a class consisting of all persons, other than the Obalon defendants, who purchased, or otherwise acquired, Obalon securities pursuant and/or traceable to Obalon’s alleged false and misleading Registration Statement and Prospectus issued in connection with the Obalon’s initial public offering on or about October 5, 2016 and/or on the open market between October 5, 2016 and January 23, 2018, both dates inclusive (the “Class Period”).
The class action lawsuit, filed in United States District Court, Southern District of California, seeks to recover damages caused by the Obalon defendants’ alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934.
According to the class action complaint, throughout the Class Period, the Obalon defendants made materially false and misleading statements regarding Obalon’s business, operational, and compliance policies. Specifically, the Obalon defendants made false and/or misleading statements and/or failed to disclose that Obalon recognized revenue in violation of Generally Accepted Accounting principles (“GAAP”); Obalon lacked adequate internal controls over accounting and financial reporting; and, consequently, Obalon’s public statements were materially false and misleading at all relevant times.
On January 23, 2018, Obalon Therapeutics, Inc., “a San Diego-based company focused on developing and commercializing novel technologies for weight loss,” issued a press release
. . . announc[ing] the termination of the underwriting agreement and cancellation of its previously announced public offering . . . of 5,454,545 shares of its common stock at a public offering price of $5.50 per share.
UBS Investment Bank, Canaccord Genuity and Stifel were acting as joint book-running managers for the offering. BTIG was acting as a co-manager. The offering was being made pursuant to a shelf registration statement . . . previously filed with and declared effective by the U.S. Securities and Exchange Commission.
[Obalon’s] [o]ffering was scheduled to close on January 23, 2018. However, a purported whistleblower contacted KPMG LLP, [Obalon’s] independent auditors, to make certain allegations relating to allegedly improper revenue recognition during [Obalon Therapeutics’] fourth fiscal quarter of 2017 (“Q4 2017”).
These allegations were reported to Obalon late in the day on January 22, 2018, making it infeasible for the [Obalon] to complete an investigation of the allegations prior to the intended closing of the public offering.
Obalon’s Audit Committee will oversee an internal investigation of these allegations . . .. [Obalon Therapeutics] is currently unable to predict the timing or outcome of the [i]nvestigation. Based on information known at this time, [Obalon’s] management does not currently believe material adjustments to the preliminary, unaudited revenue for Q4 2017 and full year 2017 previously reported by [Obalon] will be required as a result of these allegations. [Obalon Therapeutics] intends to make a further announcement regarding the outcome of the Investigation as soon as practicable.
[Emphasis added]
On this news, Obalon’s share price fell $1.73, or 33.33%, to close at $3.46 on January 23, 2018, on unusually heavy volume, representing a total decline of $11.54, or nearly 77%, from the IPO price of $15.00 per share.
Obalon Therapeutics, Inc.
Obalon Therapeutics, Inc. describes itself as
. . . an engineering-driven medical technology company with a singular focus on innovative, high-quality gastric balloon technology. Located in San Diego, California, the technical team at Obalon has a long history of working closely with leading clinicians to develop innovative medical products that revolutionize treatment of chronic disease. As a company, [Obalon] believe[s] in the fundamental value of imagination and invention, combined with rigorous testing and analysis, to ensure the highest levels of safety and performance. The result is a user-focused approach that deploys the power of advanced technological thinking to support clinical treatment objectives.
Obalon Therapeutics Investors and Stock Holders
If you own, or otherwise acquired, Obalon securities and have questions or concerns about the class action investigation, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Feb 22, 2018 | Securities Class Action Archive
Kraton Corporation Announces Q4 and Full Year 2017 Results
Kehoe Law Firm, P.C. is investigating claims on behalf of investors of Kraton Corporation (“Kraton”).
The investigation concerns whether Kraton (NYSE: KRA) and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On February 20, 2018, Kraton Corporation, “a leading global producer of styrenic block copolymers, specialty polymers and high-value performance products derived from pine wood pulping co-products,” announced its financial results for Q4 and the year ended December 31, 2017.
KRA’s President and CEO, Kevin M. Fogarty, stated:
“While our fourth quarter and full-year 2017 results are in line with the updated view for the year we provided in October, reflecting an increase in Adjusted EBITDA of 11% and 6% compared to the fourth quarter and full-year 2016 respectively, our fourth quarter 2017 results include a $7.6 million negative pre-tax impact arising from customer-observed Cariflex processing issues. Specifically, and as previously discussed, in the third quarter of 2017 we initiated the “direct-connect” manufacturing process for our Cariflex products at our manufacturing facility in Paulinia, Brazil. Although material produced from this new process has met technical specifications, during the fourth quarter 2017 certain customers notified us that they were experiencing issues processing the material. We are working with our customers to fully resolve the issue and, to date, we have implemented a number of manufacturing stabilization actions that we believe will address our customers’ processing concerns’ . . .. (Emphasis added)
The slide presentation used in conjunction with KRA’s earnings announcement can be viewed by clicking Kraton Corporation Slied Presentation, February 21, 2018.
On this news, KRA’s stock price fell sharply during intraday trading on February 21, 2018, closing down 15.14% to $43.10 from its previous stock closing price of $50.79.
Copyright © by StockCharts.com Inc., Redmond, WA. All rights reserved. http://stockcharts.com/
Kraton Corporation Investors & Shareholders
If you purchased, or otherwise acquired, KRA stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
