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Stock Losses

Dextenza Product Packaging

Company reports often wrap problems in vague words that hide rather than reveal. The complaint quotes a conference call by Ocular Therapeutix with sentences like, “The issue relates primarily to completion of an investigation that we have underway in regard to the particular matter solidifying specifications for in process [sic], 100% visual inspection of our inserts, as well as enhancing our operator training.” What was that really about? According to the complaint, more than fifty percent of lots of its drug Dextenza contained bad product, and such an extensive problem could endanger the FDA’s approval of the drug.

HD Supply Holdings Warehouse

It’s hard to say that a company does not have knowledge of negative information when its CEO and Chairman of the Board quietly unloads $54 million worth of company stock, just before revelations cause the price to fall sharply. The complaint for this class action claims that HD Supply Holdings, Inc. hid adverse information from the public, including that it could not meet its 2017 targets, that its FM segment recovery was not going well, and that the company was considering selling Waterworks, one of its major business segments.

Aerohive Logo and products

Aerohive Networks, Inc. and its subsidiaries develop cloud networking and enterprise wifi solutions, which it sells in markets worldwide. The complaint for this class action centers around statements made on a conference call concerning its sales efficiency and productivity and its prospects for the upcoming quarter. According to the complaint, these statements were violations of the Securities Exchange Act of 1934, because the company had already uncovered sales execution issues which indicated that the company would not meet its guidance for the following quarter. 

GE Capital Logo on Aqua Ground

The bad news about GE Capital’s insurance business took months to emerge, the complaint for this class action claims, but it seems to have built up over a number of years, as the company sold off some of its businesses. In June 2016, the company admitted to higher claims in long-term care and a need to reassess premium adequacy. On January 16, 2018, the company confirmed “a multi-billion dollar loss in GE’s legacy reinsurance business” as well as a need to make “statutory reserve contributions” of about $15 billion over seven years after conversations with regulators.

Vodafone Name and Logo on Wall

Telecommunications companies are highly regulated, and the complaint for this class action claims that Vodafone did not follow Australian laws requiring that companies verify customer identities before selling them prepaid mobile telephones. On January 10, 2018, the Australian Communications and Media Authority (ACMA) announced that, between January 6, 2015 and January 6, 2016, Vodafone Australia had “failed to verify the identity of at least 1,028 customers before activating their prepaid mobile services” thereby violating Australian law.

Xunlei Logo

What is the difference between a coin with monetary value and one with only internal token uses? The complaint for this class action alleges that Xunlei Limited, which offered a “OneCoin” token to users for sharing storage and bandwidth, was actually engaged in an ICO (initial coin offering) and IMO (initial miner offering) and thus violating financial laws. However, on January 12, 2018, the National Internet Finance Association of China put out a notice on “Disguised ICO Activities” that said that Xunlei “in effect substitutes Lianke for the duty to pay back project contributors in legal tender, making it essentially a financing activity and a form of disguised ICO.” It added that “with frequent promotional activities and publishing of trading tutorials, Xunlei has lured many citizens … into IMO activities.”

Yelp Logo

Yelp is famous for its online reviews, but it also offers free and paid advertising and other services. Local businesses are a primary source of its income. But the complaint says that the company gave a false picture of its prospects for 2017 by failing to reveal expected customer retention problems caused by changes in the way the company was doing business.

Injectable Varubi

Tesaro, Inc. had an approved, oral drug which it wanted to offer in an intravenous form. But it seems that the process was not that simple, and the complaint for this class action claims that the company hid bad news on the injectable form from the public. Only on January 12, 2018 did Tesaro issue a press release saying, “Anaphylaxis, anaphylactic shock, and serious hypersensitivity reactions have been reported in the postmarket setting, some requiring hospitalization.” It also said that Tesaro had issued a “Dear Healthcare Professional” letter to warn prescribers of the danger.

Exploding Computer Screen with AMD Logo

As a maker of computer-related devices, Advanced Micro Devices, Inc. knew that hacking represented a risk to its business. But the complaint for this class action claims that it made statements to the public about security without acknowledging that its processor chips were vulnerable to threats that already existed. After Google Project Zero announced that it had found a vulnerability called Spectre in some processor chips, AMD was forced to admit that its chips were susceptible to both variants of Spectre.

Lexmark Printer

Lexmark International, Inc. sells printers and supplies around the world, but one of its most important markets is Europe. According to the complaint, the company made misleading statements about end-user demand, inventory, and the possibilities for growth, particularly related to its European wholesalers, in violation of the Securities Exchange Act of 1934. The complaint claims that the company was raising its prices for supplies, and that its European customers were ordering ahead while their fixed-price contracts were in effect and building up inventory. However, it says, the company falsely portrayed the increase in sales as a result of end-user demand.

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