BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Pareteum Corporation (“Pareteum” or the “Company”) (NASDAQ: TEUM) securities between March 12, 2019 and October 21, 2019, inclusive (the “Class Period”). Pareteum investors have until December 23, 2019 to file a lead plaintiff motion.
Investors suffering losses on their Pareteum investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
On June 7, 2019, Marcus Aurelius Value published a report questioning the Company’s accounting regarding backlog, backlog conversion rates, and receivables.
On this news, the Company’s stock price fell $0.83, or over 24%, to close at $2.58 per share on June 7, 2019, thereby injuring investors.
Then, on June 25, 2019, Viceroy Research Group published a report that alleged further accounting discrepancies related to several sources of “uncollectable” revenue, concluding that “total revenue is overstated by 42%.”
On this news, the Company’s stock price fell $0.51, or over 20%, to close at $2.00 per share on June 26, 2019, thereby injuring investors further.
Then, on October 15, 2019, the Company announced that Chief Operating Officer Denis McCarthy was leaving the Company. McCarthy had maintained the Company’s 36-month contractual revenue backlog spreadsheets and analysis that were scrutinized by the Aurelius Value and Viceroy reports.
On this news, the Company’s stock price fell $0.36, over three consecutive trading sessions to close at $0.83 per share on October 17, 2019, thereby injuring investors further.
Then, on October 21, 2019, after the market closed, the Company disclosed that certain revenues recognized during 2018 and 2019 should not have been recorded during that period and that, as a result, the Company would restate their previously issued consolidated financial statements as of and for the full year ended December 31, 2018, and interim periods ended March 31, 2019 and June 30, 2019.
On this news, the Company’s stock price fell $0.4401, or nearly 60%, to close at $0.2992 on October 22, 2019, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company’s backlog had been artificially inflated; (2) that the Company was not likely to collect from several of its key customers; (3) that, as a result, the Company’s accounts receivable was overstated; (4) that the Company improperly recognized revenue from certain customer transactions; (5) that there was a material weakness in Pareteum’s internal control over financial reporting related to the Company’s backlog; (6) that, as a result of the foregoing, the Company was reasonably likely to restate financial statements for several periods; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you purchased Pareteum securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
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