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Velti (VELT) Shareholder Files Securities Fraud Class Action Lawsuit

Velti (VELT) Shareholder Files Securities Fraud Class Action Lawsuit

Summary of Vetli (VELT) securities fraud class action lawsuit

On August 20, 2013, Velti senior executives reported its 2013 fiscal second quarter financial results and disclosed that Velti had made the decision to write-down approximately $111 million to trade receivables and accrued contract receivables relating to its enterprise business. Velti further announced a “major restructuring” of its business. Velti shareholders lost 66% on that day.   This securities fraud class action then addresses the questions of whether senior executives at Velti made false and/or misleading statements and failed to disclose material adverse facts in a timely fashion to shareholders.

Basic questions regarding wether Velti senior executives committed securities fraud

  1. When did senior executives at Velti know that a large chunk of its receivables where uncollectable?
  2. Did senior executives make a conscious decision to misreport to shareholders the character and collectability of these receivables?
  3. Did senior executives knowingly provide services to certain customers with unproven and unverified ability to pay for those services?
  4. What diligence did Velti senior executives require before entering into contracts with customers?
  5. Did senior executive continue to do business with third parties when the risk of nonpayment was obvious and real?
  6. What financial controls did senior executives at Velti require to properly record receivables on the company’s financial statements?
  7. When did senior executives first become aware that the company’s financial statements were inaccurate and grossly overvalued Velti’s revenues and balance sheet?

Velti shareholders watch as the VERT stock price systematically falls since its IPO

Velt went public on January 27, 2011.  VERT common stock traded at a high of 15.71.  It now trades at 35 cents per share.  One question to be addressed in this securities fraud class action is how much of this loss is due to material misstatements by senior executives at VELT.Velti (VELT) shareholder class action stock chart showing losses

Velti shareholders that may qualify for participation in class action

This securities fraud class action is in its early stage, so Velti shareholders that fit the below criteria are encouraged to report their losses by using the web form on this page:

  • Any shareholder that purchased share between January 27, 2011 and August 20, 2013 and suffered a loss;
  • Any shareholder that purchased shares directly at Velti’s IPO.
  • Any shareholder that made a series of purchases and sales in Verti stock and requires assistance in determining the amount of his or her qualified loss.  (Federal securities laws generally only allow a shareholder to recover hard losses, not loss of stock appreciation.)
  • Any investor that purchased options and has questions as to whether the losses in options qualify to be part of any recover.
  • Any Verti employees that lost money in Verti stock, especially if those shares were purchased in a company sponsored 401K plan.