Jan 30, 2018 | Securities Class Action Archive
Investigation Commenced on Behalf of MetLife, Inc. (NYSE:MET) Investors
Kehoe Law Firm, P.C. has commenced an investigation to determine whether MetLife, Inc. and certain officers or Directors engaged in securities fraud or other unlawful business practices, as a result of MetLife’s announcement that it would postpone the earnings report and conference call related to MetLife’s results for the fourth quarter and full year ended December 31, 2017.
On the news of MetLife’s Delayed Earnings Report, the company’s stock price fell significantly in after-hours trading on January 29, 2018.
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MarketWatch reported (“MetLife shares down 6% after company postpones earnings release, discloses reserve error”) that MetLife’s “. . . shares tanked late Monday after the company released unaudited fourth-quarter results and delayed the release of official numbers, saying it has had to revise some of its reserve estimates.” MarketWatch also reported that MetLife “. . . also disclosed that state and federal regulators have questioned the company’s handling of the reserve estimates in question.”
Financial Times reported (“MetLife shares fall 10% on ‘material weakness’ warning”) that “[s]hares in MetLife dropped . . . after the insurance and pensions group warned of ‘material weakness’ in its financial reporting, forcing it to boost reserves by about $550m.” Financial Times also reported that regulators are probing the matter, as well as that “MetLife disclosed last month that it may have failed to pay thousands of pensions because the individuals had ‘moved jobs, relocated or otherwise could not be located.”
MetLife’s press release stated, in pertinent part, that
[o]n its Dec. 15, 2017, Investor Outlook Call, MetLife announced that it was undertaking a review of practices and procedures used to estimate its reserves related to certain Retirement and Income Solutions group annuitants who have been unresponsive or missing over time.
Management of the company has determined the prior release of group annuity reserves resulted from a material weakness in internal control over financial reporting. MetLife expects to increase reserves in total between $525 million and $575 million pre-tax, to adjust for reserves previously released, as well as accrued interest and other related liabilities. The amount of the reserve increase is based in substantial part on actuarial, legal, statistical, and other assumptions. If actual facts and factors differ from those the company has assumed, the reserve the company has established could be adversely or positively affected.
The total amount expected to impact fourth quarter 2017 net income is between $135 million and $165 million pre-tax, the majority of which represents a current period strengthening of reserves and will be reflected in Adjusted Earnings (formerly known as Operating Earnings)[]. [MetLife] expect[s] the full year 2017 net income impact to be between $165 million and $195 million pre-tax. In addition, the company intends to make prior period revisions to reflect the balance of these adjustments in the appropriate historical periods. The company also expects to correct historical periods for unrelated errors in those periods, as required by accounting standards. Those errors were previously recorded in the periods in which the company identified them.
. . .
In connection with MetLife’s review and enhancement of the processes and procedures relating to its Retirement and Income Solutions business in the United States, MetLife is currently reviewing its processes and procedures for identifying unresponsive and missing international group annuity annuitants and pension beneficiaries. In addition, MetLife recently initiated an ongoing global review of its processes and procedures for identifying unresponsive and missing policyholders and beneficiaries for the other insurance and annuity products it offers. MetLife is not currently aware of any material deficiencies in its identification of unresponsive or missing annuitants, policyholders or beneficiaries with respect to such products under review.
MetLife had previously informed its primary state regulator, the New York Department of Financial Services, about this matter and is responding to questions from them and other state regulators. The U.S. Securities and Exchange Commission enforcement staff has also made an inquiry regarding this matter and MetLife is responding to its questions. To date, MetLife is not aware of any intentional wrongdoing in connection with this matter.
[Emphasis added]
MetLife Investors Impacted by MetLife’s Stock Price Drop
MetLife investors who have questions or concerns about Kehoe Law Firm’s investigation related to MetLife’s stock price drop on the company’s announcement of the postponement of its fourth quarter earnings release can contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected] for additional information.
Jan 27, 2018 | Securities Class Action Archive
Grupo Televisa Announces Material Weakness in Internal Control Over Financial Reporting
On January 26, 2018, Grupo Televisa, S.A.B. (NYSE:TV) disclosed in a Form 6-K filing that Grupo Televisa’s
. . . management, in consultation with the Audit Committee of [Grupo Televisa’s] board and after discussions with PricewaterhouseCoopers, S.C. (“PwC”), [Grupo Televisa’s] independent registered public accounting firm, has concluded that certain material weaknesses in [Grupo Televisa’s] internal control over financial reporting existed as of December 31, 2016. As a result, the report of management on the effectiveness of [Grupo Televisa’s] internal control over financial reporting, [Grupo Televisa’s] conclusion regarding the effectiveness of disclosure controls or procedures, and PwC’s audit report (each included in [Grupo Televisa’s] Annual Report on Form 20-F for the year ended December 31, 2016) should no longer be relied upon for the reasons described below.
The material weaknesses in [Grupo Televisa’s] internal control over financial reporting related to (i) the design and maintenance of effective controls over certain information technology controls which support systems that are relevant to the provisioning, updating and deleting of users’ access to those systems, the periodic review of users’ access to these systems, developers’ access to certain of these systems and appropriate segregation of duties; (ii) the design and maintenance of effective controls over segregation of duties within the accounting system, including certain individuals with the ability to gain access to prepare and post journal entries across substantially all key accounts of [Grupo Televisa] without an independent review performed by someone other than the preparer; and (iii) ineffective controls with respect to the accounting for certain revenue and related accounts receivable in [Grupo Televisa’s] cable companies and content division.
[Emphasis added]
For additional information, please see the Reuters article, “Mexico’s Grupo Televisa finds weakness in financial controls, shares fall.”
Grupo Televisa’s American Depositary Receipt Price Drop
Grupo Televisa’s ADR price fell on January 26, 2018 on the news of Grupo Televisa’s disclosure concerning its conclusion that certain material weaknesses in Televisa’s internal control over financial reporting existed as of December 31, 2016.
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Kehoe Law Firm Investigating Potential Securities Claims on Behalf of Grupo Televisa Investors
Kehoe Law Firm is investigating potential claims on behalf of Grupo Televisa investors to determine whether Grupo Televisa and certain of its officers or directors engaged in securities fraud or other unlawful business practices. Grupo Televisa investors with questions or concerns should contact John Kehoe, Esq., 9215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 26, 2018 | Securities Class Action Archive
Shares of Ballard Power Systems Dive More Than 15% As of Late Thursday, January 25, 2017 – Kehoe Law Firm Commences Investigation of Securities Claims
Kehoe Law Firm has commenced an investigation of potential securities claims on behalf of purchasers of the securities of Ballard Power Systems Inc. (NASDAQ:BLDP) to determine whether BLDP may have issued materially misleading business information to investors.
On January 25, 2018, The Motley Fool reported (“Why Ballard Power Systems Inc.’s Shares Plunged 16% Today”) that “[s]hares of fuel cell company Ballard Power Systems Inc. . . . plunged as much as 15.8% late Thursday after a short-seller attacked the stock. At 3:15 p.m. EST, [BLDP] shares were still near their daily low, down 15%.” [Emphasis in original]
Spruce Point Capital Management, according to The Motley Fool, “released research via a press release and an article on [Seeking Alpha] laying out its short case for [Ballard Power Systems] stock.” The Motley Fool reported that
Spruce Point [Capital Management] thinks Ballard’s Chinese partnerships won’t live up to expectations. The research report argues, for the most part, that the fuel cell market isn’t all it’s cracked up to be in China, and that as a result there’d be very few long-term wins for joint ventures there. [Emphasis added]
Ballard Has High Percentage Downside Risk – Seeking Alpha Reports About Spruce Point Capital Management’s Review of Ballard Power
On January 25, 2018, a Seeking Alpha article (“China-Based Investigation Into Ballard Power Suggests Earnings Disappointment, 35-70% Downside Risk”) reported the following summary gleaned from Spruce Point Capital Management’s research report on Ballard Power Systems:
[BLDP’s] stock rose +167% in 2017 largely on a capital infusion from China’s Broad Ocean, improved financial performance, and hopes that its Chinese partnerships would expand profit potential.
[Spruce Point Capital’s] China due diligence suggests its partnerships are not likely to succeed given Broad Ocean’s weak financial and market position. Further, [Spruce Point Capital] believe[s] the China market is developing below plan.
Ballard [Power] has prior failures in China (Azure) and a general history of not delivering on its business objections, leading to successive financial losses and share dilution.
Ballard [Power] has only risked $1m of capital into the Synergy JV, and insiders own just 0.5% of the stock. Broad Ocean can sell its 17m shares in July 2018, which [Spruce Point] expect[s] to be a big overhang.
Spruce Point Capital also, as reported by Seeking Alpha, stated that “Ballard [Power] trades at an all-time high valuation on excessive optimism at high risk of disappointing. By normalizing its valuation, [Spruce Point Capital] see[s] 35% to 70% downside risk.”
Spruce Point Capital Management’s review of Ballard Power, as reported by Seeking Alpha, found that “[b]ased on [Spruce Point’s] on-the-ground China research, in [Spruce Point’s] opinion, Ballard is set to disappoint expectations as a result of having selected the wrong Chinese partners, and the market and infrastructure for its products not having developed according to plan.” [Emphasis in original]
Ballard Power Systems Stock Suffers Steep Price Drop
On the news of Spruce Point Capital’s research report, shares of Ballard Power fell $0.52 per share, or more than 13% from its previous stock closing price, to close at $3.27 per share on January 25, 2018.
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Have You Purchased, Or Otherwise Acquired, Stock Shares of Ballard Power Systems?
If you purchased, or otherwise acquired, shares of Ballard Power stock and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 24, 2018 | Securities Class Action Archive
Obalon Securities Investigation As a Result of the Company’s Cancellation of a Previously Announced Public Stock Offering of 5,454,545 Common Stock Shares
Kehoe Law Firm, P.C. is investigating claims on behalf of Obalon investors to determine whether Obalon Therapeutics and certain of its officers or directors engaged in securities fraud or other unlawful business practices.
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]
Obalon’s Announcement of The Cancellation of Its Public Stock Offering Results in OBLN Stock Drop
On the news of the cancellation of its public stock offering, Obalon’s stock dropped $1.73, or 33.33%, to close at $3.46 on January 23, 2018.
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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 Stock Holders
If you own, or otherwise acquired, Obalon stock and have questions or concerns about Kehoe Law Firm’s 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].
Jan 22, 2018 | Securities Class Action Archive
Aerohive Networks, Inc. Class Action Filed on Behalf of Investors Who Purchased, or Otherwise Acquired, Shares of Aerohive Between November 1, 2017 and January 16, 2018
Aerohive Networks, Inc. (NYSE:HIVE)
On January 19, 2018, a class action lawsuit was filed against Aerohive Networks, Inc. (McGovney v. Aerohive Networks, Inc., et al, No. 18-00435) in United States District Court, Northern District of California, on behalf of a class consisting of all persons and entities, other than the named Defendants, who purchased, or otherwise acquired, the securities of Aerohive Networks between November 1, 2017 and January 16, 2018, both dates inclusive.
The class action lawsuit seeks to recover compensable damages caused by the Aerohive 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. The complaint alleges that the Aerohive Defendants made materially false and/or misleading statements by misrepresenting and failing to disclose adverse facts pertaining to Aerohive’s business, operational and financial results known to the Aerohive Defendants or recklessly disregarded by them.
According to the class action complaint, on November 1, 2017, during Aerohive’s Q3 2017 conference call, Aerohive’s CFO, John Ritchie, stated that “[w]e are currently expecting Q4 revenue in the range of $40 million to $42 million,” and that “[w]e realized significant sales efficiency with our non-GAAP sales and marketing costs.”
On January 16, 2018, according to the class action complaint, Aerohive announced that it “expects net revenue for the fourth quarter to be approximately $37 million, which is below [Aerohive’s] previously stated guidance of $40 million to $42 million.” Aerohive’s President and CEO, David Flynn, stated that Aerohive “delivered non-GAAP operating profitability in [Aerohive’s] fourth quarter, but were disappointed that [Aerohive’s] revenue was below [its] prior guidance.” The CEO further stated, “Following the change in [Aerohive’s] leadership at the end of [its] third quarter, [Aerohive] uncovered underlying sales execution issues which became fully apparent in the last month of the fourth quarter.”
According to the class action complaint, on this news, Aerohive shareholders were damaged when Aerohive’s share price fell $1.63 per share, or over 29%, from Aerohive’s previous closing stock price to close at $4.07 per share on January 17, 2018.
Aerohive’s Stock Closing Price on January 17, 2018
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Aerohive Networks, Inc. Investors
If you purchased, or otherwise acquired, shares of Aerohive Networks, Inc. stock between November 1, 2017 and January 16, 2018 and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Jan 22, 2018 | Securities Class Action Archive
Class Action Filed on Behalf of Advanced Micro Devices Investors Who Purchased, or Otherwise Acquired, AMD Securities Between February 21, 2017 and January 11, 2018
Advanced Micro Devices, Inc. (NASDAQ:AMD)
On January 16, 2018, a class action was filed against California-based Advanced Micro Devices, Inc. and certain of its officers in United States District Court, Northern District of California, (Kim v. Advanced Micro Devices, Inc., et al, No. 18-00321), on behalf of a class consisting of investors who purchased or otherwise acquired the securities of AMD between February 21, 2017 and January 11, 2018, both dates inclusive (the “Class Period”).
The class action lawsuit against Advanced Micro Devices seeks to recover compensable damages caused by the Advance Micro Devices 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.
Alleged Materially False and Misleading Statements and Failure to Disclose a Fundamental Security Flaw in AMD’s Processor Chips
According to the class action complaint, the AMD Defendants
. . . throughout the Class Period, . . . made materially false and misleading statements regarding [AMD’s] business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) a fundamental security flaw in AMD’s processor chips renders them susceptible to hacking; and (ii) as a result, AMD’s public statements were materially false and misleading at all relevant times.
On January 3, 2018, media outlets reported that Google Project Zero’s security team had discovered serious security flaws affecting computer processors built by Intel Corporation (“Intel”), AMD and other chipmakers. In a blog post, the Project Zero team stated that one of these security flaws—dubbed the “Spectre” vulnerability—allows third parties to gather passwords and other sensitive data from a system’s memory.
On January 3, 2018, in response to the Project Zero team’s announcement, a spokesperson for AMD advised investors that while its own chips were vulnerable to one variant of Spectre, there was “near zero risk” that AMD chips were vulnerable to the second Spectre variant.
The class action complaint filed against AMD stated that in a post-market press release issued by Advanced Micro Devices on January 11, 2018, AMD acknowledged that its chips were, in fact, susceptible to both variations of the Spectre security flaw.
AMD CEO Lisa Su Confirms Susceptibility of AMD Products to Spectre Vulnerabilities & AMD Stock Drop
Further, according to the AMD class action complaint, on January 11, 2018, “. . . during an interview with Yahoo Finance, AMD’s Chief Executive Officer . . . Lisa Su confirmed news that its products were susceptible to Spectre vulnerabilities, stating: “to clarify, for Meltdown, AMD is not susceptible… we don’t have a susceptibility to that variant. But with Spectre, AMD is susceptible.” [Emphasis in original]
The price of AMD’s stock share price fell $0.12, or 0.99%, on this news to close at $12.02 on January 12, 2018.
Investors Who Purchased Advanced Micro Devices Stock Shares
If you purchased, or otherwise acquired AMD stock shares between February 21, 2017 and January 11, 2018, both dates inclusive, and have questions or concerns about your potential legal rights or claims, please contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
