SAN DIEGO & NEW YORK--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that purchasers of Ubiquiti Networks, Inc. (NASDAQ: UBNT) have filed a class action complaint against the company's officers and directors for alleged violations of the Securities Exchange Act of 1934 between August 3, 2017 and February 20, 2018. Ubiquiti develops technology platforms for hi-capacity distributed Internet access, unified information technology, and next-generation consumer electronics for home and personal use.
View this information on the law firm's Shareholder Rights Blog:
Ubiquiti Accused of Overstating Its Financial Outlook
According to the complaint, throughout the class period, Ubiquiti reported "record" financial results and outsized financial guidance as a result of "strong demand for new product offerings." Ubiquiti further touted its unconventional sales force entitled the "Ubiquiti Community," which had allowed and would continue to allow Ubiquiti to grow in perpetuity while "avoid[ing the cost of a direct] sales force." As these statements artificially inflated the company's stock, the company's Chief Executive Officer, Chairman and founder, Robert J. Pera, sold one million shares of Ubiquiti common stock for gross proceeds of $61.25 million.
On September 18, 2017, Citron Research published a report detailing a series of "alarming red flags" indicating that Ubiquiti engaged in corporate fraud and misrepresented the size of the Ubiquiti Community and levels of accounts receivable. In response, Ubiquiti filed a Form 8-K increasing the company's financial guidance for 1Q18 and announcing $100 million in newly authorized share repurchases. The Form 8-K also announced that Pera would host Ubiquiti's first Investor Update on September 26, 2017. The complaint contends that the Form 8-K, the statements at the Investor Update, and subsequent press releases and earnings calls for 1Q18 and 2Q18 caused investors and analysts to ignore the Citron Report and Ubiquiti's stock price to increase to more than $82 per share. The stock then plummeted more than 25% on February 20, 2018, when Ubiquiti announced that the Securities and Exchange Commission issued subpoenas requesting information about the company's accounting practices, and financial information, among other things.
Ubiquiti Shareholders Have Legal Options
If you would like more information about your rights and potential remedies, contact attorney Leonid Kandinov at (800) 350-6003, LKandinov@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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