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Stock Losses

TD Bank Logo

A March 2017 CBC News article on Toronto-Dominion (TD) Bank, quoted in the complaint for this class action, said that “teller’s sales revenue goals have more than tripled in the past three years.” The result? The complaint claims that this pressure caused employees to take illicit actions that increased revenue at customers’ expense and without their knowledge. However, none of this was revealed in the bank’s public filings, the complaint says, in violation of the Securities Exchange Act of 1934. 

Homex Logo

The Securities and Exchange Commission (SEC) used satellite imagery to find evidence of fraud in the financials of Desarrolladors Homex SAB de CV, or Homex Development Corporation. According to the complaint for this securities class action, Homex reported that it had built a certain number of homes, but satellite photos at many of the locations showed vacant lots. The SEC eventually charged Homex with a $3.3 billion accounting fraud, and the complaint thus claims that Homex’s financial reports were false, in violation of the Securities Exchange Act of 1934, making the company responsible for stock losses when corrective information emerged.  

Tiny House, Calculator, Papers, and Money

Did the heavily-indebted Walter Investment Management Corporation overstate figures to make its deteriorating condition seem more solid? The complaint for this class action turns a suspicious eye on the company’s “double-counting” of certain taxable income and its need to restate some of its financial reports, alleging that they were violations of the Securities Exchange Act of 1934. The restatements significantly worsened the picture for the company, and while it was able to get waivers for some of its loan covenants, they came with a requirement for restructuring that stands to dilute an already devalued stock.

Citizens Old Annual Report Cover

The complaint for this class action alleges that Citizens, Inc. sells insurance policies in foreign countries in order to evade US regulations. It claims that it uses improper growth projections to enroll customers in programs where dividends are used to buy the company’s stock, and sells policies that require payment of US taxes as if they were tax-exempt. Among other things, the company has not held a conference call in two years, and the complaint claims it is under investigation by both the SEC and IRS.

Insys Logo and Test Tubes

Misstated figures can simply be errors, but the complaint for this class action says that Insys Therapeutics committed fraud by manipulating figures to hide the company’s falling revenues, in violation of Securities Exchange Act of 1934. Why did it feel it needed to do that? Because, the complaint claims, the company had previously engaged in the encouragement of off-label use and a kickback scheme, and after that was revealed, its former customers were reluctant to do business with it. 

BioAmber Logo

BioAmber has a need to sell a great deal of bio-succinic acid from its expensive new facility, the complaint for this class action alleges. It suggests that the company’s overestimation of its revenues for the fourth quarter of 2016 was a deliberate strategy, designed to keep its stock prices up before it raised money in two new stock offerings.

JBS Meatpacking

This class action accuses Brazilian meatpacker JBS of providing false or misleading information in violation of the Securities Exchange Act of 1934. That may sound tame, but the complaint claims that the company touted its emphasis on quality and compliance, while bribing inspectors to overlook “processing rotten meat and running plants with traces of salmonella…” and other to keep silent. The complaint also claims that the company received questionable loans and its officials engaged in insider trading of its stock.

Tempur Sealy Adjustable Mattresses

When a supplier puts the screws on a customer during a vulnerable time, it’s understandable when the customer, later finding itself in a more favorable position, turns the tables. Tempur Sealy International, Inc. may have been too sure of its upper hand when it put the screws on Mattress Firm. At any rate, the complaint for this class action claims that Tempur Sealy violated the Securities Exchange Act of 1934 in not disclosing the risk it was taking in strong-arming Mattress Firm. When it finally lost its largest customer, the complaint said, the market was shocked, and its stock price fell.

Adult Hands Holding Baby Feet

OvaScience develops fertility treatments using egg precursor cells to improve egg health and in vitro fertilization (IVF). Unfortunately, the complaint for this class action alleges that Ova’s statements about its Augment treatment didn’t just violate the Securities Exchange Act of 1934; it says they were also fraudulent. Ova claimed to be on track to sell 1,000 cycles of its Augment treatment in 2015, but by late September announced it had only sold about 35; also, the complaint says that when closely examined, the data offered proved much less promising than the company had implied. By August 2017, the stock had fallen by 97% from its highest point.  

Image of Hands, Papers, and Calculator

When a company’s figures are inaccurate, investors worry not only about the specific figures but also about the company’s internal controls on reporting. The complaint for this class action claims that US Physical Therapy, Inc. (USPh) had inadequate controls, resulting in inaccurate treatment of redeemable non-controlling interest of acquired partnerships, in violation of GAAP and the Securities Exchange Act of 1934.

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