Girard Gibbs has filed a class action lawsuit against Groupon, Inc. (NASDAQ: GRPN) on behalf of investors who purchased Groupon common stock between November 4, 2011 and March 30, 2012. The lawsuit charges Groupon, and certain of its officers and directors, and the underwriters of Groupon’s initial public offering with violations of federal securities laws for false and misleading statements related to Groupon’s financial results and internal controls.
The lawsuit, captioned Einspahr v. Groupon, Inc. et al., is pending in the United States District Court for the Northern District of Illinois. The complaint alleges that defendants violated the Securities Act of 1933 and the Securities Exchange Act of 1934 by issuing a series of misrepresentations and omissions related to Groupon’s internal controls, financial results and business.
In November 2011, Groupon went public with an offering of 35 million shares priced at $20 per share, netting Groupon $658 million and its underwriters $42 million. In a press release and its first annual report filed with the Securities and Exchange Commission on March 30, 2012, Groupon announced that it was revising its fourth quarter 2011 financial results, resulting in a $14.3 million reduction to its fourth quarter revenues. Groupon also disclosed that its auditors found a material weakness in its internal controls, and that it could not assure the accuracy of its financial statements.
On April 2, 2012, the first trading day following Groupon’s announcement, the company’s stock price dropped by nearly 17% to $15.27, well below its $20 IPO price and the class period high of $26.19.
“The fact that Groupon had to revise its numbers so soon after its initial public offering raises significant questions about its financial reporting,” said attorney Jonathan Levine of Girard Gibbs. “It is crucial that investors in public companies are provided with the most accurate information available when they are making the decision to invest.”
