NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/ubiquitinetworks/) today announced that a class action has been commenced on behalf of purchasers of Ubiquiti Networks, Inc. (“Ubiquiti”) (NASDAQ:UBNT) common stock during the period between August 3, 2017 and February 20, 2018 (the “Class Period”). This action was filed in the Southern District of New York and is captioned Kho v. Ubiquiti Networks, Inc., No. 18-cv-02242.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from February 22, 2018. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, David C. Walton of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/ubiquitinetworks/. 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.
The complaint charges Ubiquiti and certain of its officers with violations of the Securities Exchange Act of 1934. Ubiquiti develops technology platforms for hi-capacity distributed Internet access, unified information technology, and next-generation consumer electronics for home and personal use. Ubiquiti claims that the key to keeping costs disruptively low is eschewing a traditional sales force in favor of the “Ubiquiti Community,” explaining that its “business model is driven by a large, growing and highly engaged community of service providers, distributors, value added resellers, systems integrators and corporate IT professionals, which [the Company] refer[s] to as the Ubiquiti Community.”
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose material adverse facts about the Company's business, operations and prospects. Specifically, the complaint alleges that during the Class Period, Ubiquiti had been inaccurately reporting its operating metrics and using improper accounting practices, including overstating the number of actual registered users participating in the Ubiquiti Community, as well as the levels and importance of their engagement with the Ubiquiti Community; overstating accounts receivable; and overstating the profits derived from the Company’s U.S. operations and thus its U.S. operations profit margins. In addition, much of Ubiquiti’s distributor network was made up of overseas entities and individuals who were doing business in sanctioned countries and in jurisdictions identified by the Financial Action Task Force as “noncooperative jurisdictions” with regard to anti-money laundering regulations. As a result of these false statements and/or omissions, the price of Ubiquiti common stock was artificially inflated to as high as $81.74 per share during the Class Period.
On September 18, 2017, Citron Research issued a report detailing a series of "alarming red flags" indicating that the Company had been deceiving investors and was engaged in "fraud," including, among other things, misrepresenting the size of its purported "Ubiquiti Community," as well as its levels of accounts receivable. This partial disclosure caused Ubiquiti's stock price to fall $4.33 per share, or nearly 8%, to close at $50.62 per share on September 18, 2017.
On November 9, 2017, Ubiquiti acknowledged it had inflated the size of the Ubiquiti Community due to a purported “reporting error” and admitted in an SEC filing that it had only about 609,000 registered users, not the 4 million it had repeatedly reported in its SEC filings. Then, on February 20, 2018, the Company filed a Form 8-K disclosing that on February 13, 2018, the SEC had issued subpoenas to Ubiquiti and certain of the Company’s officers requesting documents and information regarding a range of topics, including metrics relating to the Ubiquiti Community and the Company’s accounting practices, financial information, auditors, international trade practices, and relationships with distributors and various other third parties. Following the disclosure that the SEC had served subpoenas on the Company, the price of Ubiquiti common stock plummeted, falling $18.76 per share, or more than 25%, from its close of $74.04 per share on February 16, 2018, to close at $55.28 per share on February 20, 2018.
Plaintiff seeks to recover damages on behalf of all purchasers of Ubiquiti common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.