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Stock Losses

Synchronoss Sign

Why would a new CEO and CFO resign after less than two months with a company? According to the complaint for this class action, in Syncronoss’s case, it’s likely they had a full view of the company’s deteriorating financial condition plus the illicit measures that had been taken to hide it—which the complaint claims are violations of the Securities Exchange Act of 1934. Among the complaint’s allegations against the company are that it falsely inflated revenues in 2015 and 2016 by prematurely recognizing them, improperly booking them, and recognizing them for transactions that never in fact happened.

Brain with Pink Spot

This securities class action against Immunocellular Therapeutics, Ltd. (IMUC) makes a two-pronged claim. First, the complaint alleges, the company misrepresented the viability of the company’s main vaccine candidate; second, it engaged in an illegal stock promotional scheme. The complaint alleges that the company and individual defendants violated the Securities Exchange Act of 1934.

US Steel Plant

According to the complaint for this class action, United States Steel Corporation’s Carnegie Way, a “transformational process” named after founder Andrew Carnegie, was a sham that took cost-cutting to the point where it cost the company money. Plant managers were required to “jury rig” machines to keep them working rather than buying parts and making real repairs, the complaint claims, while massive layoffs left plants with inexperienced employees who did not know how to maintain equipment. The result was an increase in downtime, so that production fell by 20%. Hiding this got the company through a successful secondary public offering and allowed the CEO and CFO to unload more than half of their shares of stock, but the complaint alleges that the company violated both the Securities Act of 1933 and the Securities Exchange Act of 1934.

Installation of Solar Panels

Sunrun, Inc. artificially inflated its stock price, claims the complaint for this class action, simply by delaying the reporting of order cancellations before its initial public offering (IPO). It was able to do this because the omissions of cancellations artificially inflated its Megawatts Booked figure, which was a key metric used to measure its growth and financial health. Because the company hid these actions, the complaint alleges that it violated the Securities Exchange Act of 1934 and is responsible for stock losses suffered by investors the actions were revealed. 

PCM Logo

What happens when an entity turns on a company it provides services for and actively works to undermine it? For one thing, the complaint for this class action says that the company must inform investors or be in violation of the Securities Exchange Act of 1934. According to the complaint, PCM has failed to inform investors that the figures it published for an acquisition were false, has failed to take the impairments required, and has not disclosed that a company related to the acquisition is actively trying to harm it by disclosing its confidential information and stealing employees and customers.

KBR Sign at Corporate Headquarters

The complaint for this class action claims that KBR, Inc. hid that employees or third parties violated bribery and corruption laws. The complaint alleges that the company violated the Securities Exchange Act of 1934 when it published material that made it seem as if bribery and corruption were forbidden and persons in danger of succumbing to them could be properly vetted and controlled. The truth came to light, the complaint claims,  when the UK’s Serious Fraud Office announced an investigation into the company’s UK subsidiary.

Anadarko Operations in Colorado

The complaint for this class action alleges that Anadarko Petroleum Corporation has not taken proper safety precautions in its Colorado oil and gas operations, for example in an instance where two people were killed by an explosion in a Colorado home. When the price of oil fell in 2014, the complaint claims, the company began doing far less remediation work than was needed, laid off skilled employees, and did not disclose this laxity in violation of the Securities Exchange Act of 1934. This led to accidents, the complaint says, and to stock losses. 

Coking Image from Hongli Website

The complaint for this class action begins its section on substantive allegations by discussing and reproducing a series of consolidated balance sheets from the filings of Hongli Clean Energy Technologies Corporation. The complaint claims that the company did not properly take impairments when it should have and concealed material information, in violation of Securities Exchange Act of 1934. It is supported by a document from the company announcing the dismissal of its former independent auditor and a letter outlining the auditor’s disagreement with the company on the time of an impairment.

Rackspace Equipment

Rackspace provides cloud-based services that allow businesses to operate in a public or private cloud. One of its biggest customers was the UK-based Vodafone Group, which Rackspace CEO Taylor Rhodes called one of Rackspace’s “largest and longest-tenured customers.” Yet the company seems to have ignored the fact that losing the Vodafone contract would impact its revenues. Not only did the company conceal the impending loss; it even said that the company expected “to grow this revenue back with them over time” and insisted that its 2015 guidance had not changed.

Barrick's Veladero Mine

Barrick Gold Corporation is a mining company that explores for gold and develops gold mines. But the complaint claims that pipe ruptures caused temporary suspensions in its Veladera mine in Argentina, and that the company violated the Securities Exchange Act of 1934 by minimizing the latest incident and not lowering its guidance for 2017. Stock losses at the eventual announcement were more than 11%.

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