NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/lionsgate/) today announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Southern District of New York on behalf of purchasers of Lions Gate Entertainment Corp. (“Lionsgate” or the “Company”) (NYSE:LGF) common stock between February 11, 2013 through March 13, 2014, inclusive (the “Class Period”), seeking to pursue remedies against the Company and certain of its current and former officers and directors under the Securities Exchange Act of 1934 (the “Exchange Act”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/lionsgate/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Lionsgate is a film studio that produces and distributes motion pictures, television, home and family entertainment, and digital media. The complaint alleges that by the start of the Class Period, and unbeknownst to investors, Lionsgate was under investigation by the U.S. Securities and Exchange Commission (“SEC”) for making false and misleading statements and omissions concerning a series of transactions (“Transactions”) designed to prevent a takeover of the Company by Carl Icahn and his affiliates (“Icahn”). During the Class Period, however, Lionsgate and the other defendants misrepresented and/or failed to disclose the existence of the SEC investigation, the prospect of legal proceedings associated with the misconduct under investigation, and the Company’s exposure to loss in connection therewith.
Beginning in or about March 2010, Icahn commenced a series of tender offers intended to facilitate his takeover of the Company by increasing his ownership interest in Lionsgate and allowing him to designate his chosen representatives to the Company’s board of directors (“Board”). Threatened by the possibility of losing control of the Company or being replaced, Lionsgate’s management and Board sought to block Icahn’s plans. On July 20, 2010, the Board – with management’s assistance – approved and facilitated the Transactions, which resulted in placing over 16 million shares of common stock in the hands of director Mark Rachesky and/or entities he controlled (“Rachesky”) while diluting the interests of other Lionsgate shareholders, including Icahn. Rachesky was a staunch supporter of Lionsgate management and the Board.
Thereafter, Lionsgate publicly represented that the Transactions were “a key part of the Company’s previously announced plan to reduce its total debt, as well as its nearer term maturities.” In fact, the SEC found, Lionsgate had not announced any such debt-reduction plan. Moreover, Lionsgate failed to adequately disclose the true purpose of the Transactions: to stifle Icahn’s takeover attempts. Following the public announcement of the Transactions, Lionsgate continued to misrepresent their true purpose to investors.
On March 13, 2014, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (“Order”), which memorialized the resolution of the investigation and charges against Lionsgate for making false and misleading disclosures regarding the Transactions. As detailed in the Order, and alleged in the complaint, Lionsgate settled the investigation by, among other things, agreeing to pay $7.5 million in fines and acknowledging that it had violated the federal securities laws.
The issuance of the Order exposed Lionsgate’s false and misleading representations and omissions during the Class Period. Specifically, Lionsgate repeatedly represented that it had disclosed all material legal proceedings, when, in fact, it failed to disclose the existence of the SEC investigation and its material risk and exposure to loss. Accordingly, Lionsgate’s public statements regarding its involvement in and exposure to claims and legal proceedings were false and materially misleading when made, and otherwise omitted material information. Indeed, Lionsgate and the other defendants knew or recklessly disregarded that the existence of the SEC’s investigation exposed the Company to material risks and uncertainties and exposure to loss, including regulatory proceedings, sanctions and fines.
In response to the publication of the Order on March 13, 2014, the price of Lionsgate common stock declined as the market digested the truth regarding the Company’s exposure, thereby damaging investors. In the lawsuit filed today, the plaintiff seeks to recover damages on behalf of all purchasers of Lionsgate common stock during the Class Period. The plaintiff is represented by Robbins Geller, which has extensive expertise in prosecuting investor class actions and other matters involving financial fraud.
With more than 200 lawyers in 10 offices, Robbins Geller represents U.S. and international institutional investors in contingency-based securities and corporate litigation. The firm has obtained many of the largest securities class action recoveries in history, including the largest jury verdict ever in a securities class action. Please visit http://www.rgrdlaw.com for more information.