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Global Power sued for securities fraud

On May 6, 2015, Global Power Equipment disclosed to investors that they should not rely on its 2014 financials as those financials underreported the true cost of sales.  It is believed that Global Power Equipment underreported the cost of raw materials such as steel.  The stock lost 33% of its value on this news. 

Etsy shareholder lawsuit

One month after Etsy’s IPO, a third party report stated that over 5% of the goods offered for sale on Etsy may infringe on copyright or trademark rights and that the owners of those rights are more aggressively enforcing them.  This case alleges that Etsy should have made more disclaimers about this potential problem during the IPO process.

FXCM Shareholder Class Action

On January 15, 2015, the Swiss National Bank announced that it was ending a policy to support the euro against the Swiss frank, causing the Swiss franc to increase almost 41% verses the euro.  That same day FXCM announced a $225 million loss due to this volatility and FXCM shareholders lost almost 90% of their value in three trading days.  This securities fraud complaint asks the question whether executives at FXCM fairly disclosed the potential risks to its business due to sudden market volatility.

Insulet Shareholder Lawsuit

On April 30, 2015 Insulet announced that its revenues for the first quarter 2015 did not meet expectations and rationalized to investors that the revenue shortfall would be realized in subsequent quarters.  This class action alleges that Insulet executives overstated revenue and revenue growth expectations for several years to artificially inflate the stock price.

Rubicon Securities fraud

This case asks a basic question:  Did Rubicon intentionally keep bad news from investors so a large shareholder (controlled by a director) could sell over $30 million in common stock at a secondary offering in March 2014 at an inflated value?

CBMG sued for securities fraud

This is yet another case where executives hired and paid third party stock promoters to increase interest in the stock and raise the stock price, but failed to disclose this paid relationship to investors.  Cellular Biomedicine’s executives are accused or not disclosing that they paid third party promoters to push the stock which created an artificial valuation.

AudioEye securities fraud

This is another software company with questionable revenue recognition practices.  AudioEye included in its revenue numbers revenue from non-cash exchanges of licenses to its software in exchange for a license in customers’ software - to the tune of $8,100,000 in revenue several for 9 months of 2014.  This revenue reversal will cascade through AudioEye’s financial statements.  This securities fraud class action then seeks to hold the company and executives liable for lack of proper financial controls.

ForceField Energy Class Action Lawsuit

This case strikes at the heart of securities fraud.  It alleges that ForceField’s management hired and paid a stock promoter to increase the company’s stock price.  It alleges that those executives even reviewed and commented on these so-called independent reports.  Yet these executives did not disclose to investors that the company was paying for those “independent” reports. Plus the complaint alleges that these same executives did not disclose the problems each has had with similar stock promotion schemes in the past.

iDreamSky securities fraud lawsuit

iDreamSky operates a Chinese mobile game platform.  Like all game platforms, one trick is to turn free users into paying users.  This class action alleges that iDreamSky mislead investors in its IPO about the company’s ability to do just that:  convert free users into paying users.

Boulder Brands lawsuit

Since at least February 2013, Boulder Brand's management had been forecasting gross margin expansion - based in part on a new product mix due to recent acquisitions.  In October, 2014 executives told investors that investor-anticipated gross margin expansion would not happen as forecasted as the company was experiencing inventory problems and not selling enough high margin products.  This lawsuit alleges that Boulder Brands should have made more accurate disclosures about its business problems prior to October, 2014.


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