According to a press release dated July 14, 2011, the plaintiffs allege violations of Sections 10(b) and 20(a) of the Exchange Act and the rules promulgated thereunder. The complaint alleges that during the class period, defendants issued a series of materially false and misleading statements regarding the Company's business and financial results. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (1) the company's tax provisions did not conform to Generally Accepted Accounting Principles; (2) the company overstated its account receivables; (3) the company consistently failed to tie customer payments to specific invoices; (4) the company lacked adequate internal and financial controls; and (5) as a result of the foregoing, the company's statements were materially false and misleading at all relevant times.
On March 24, 2011, Seeking Alpha published a report accusing the company of engaging in a number of accounting manipulations, including: a) manipulating stated organic growth; b ) overstating profit margins; c) overstating its accounts receivables; d) manipulating tax liabilities; and e) inflating cash flows. The report concluded that the company's "problems run deeper than accounting… [the] story also comes with multiple auditor resignations, governance abuses, misrepresented organic growth, questionable cash flow and a contentious CEO." On this news, the company's shares declined $7.20 per share, or nearly 24%, to close on March 24, 2011, at $22.52 per share, on unusually heavy trading volume.
On June 30, 2011, the media reported that the shareholders of Peak Performance Solutions, Inc. ("Peak"), who sold their business to Ebix, filed a lawsuit in the United States District Court for the Southern District of Ohio, claiming that Ebix was consistently unable to bill customers properly, tie customer payments to invoices, and provide basic financial data or calculate revenues for Peak. On this news, the Company's shares declined an additional $1.30 or more than 6% and closed at $19.05.
On September 19, 2011, the District Court in the Southern District of New York issued an Order to Transfer Venue of the present case to the Northern District of Georgia under Docket Number 11-CV-02400.
On October 14, 2011, the Court issued an Order appointing the Lead Plaintiff and approving of the Lead Counsel selection. Further, on October 19, 2011, the Court issued an Order consolidating docket number 11-CV-03269 under the docket number 11-CV-02400 and re-titled the case file In Re: EBIX, Inc. Securities Litigation.
On November 28, 2011, the Plaintiffs filed their consolidated amended complaint.
On September 28, 2012, the Court issued an Order denying Defendants' Motion to Dismiss Consolidated Amended Complaint.
On July 2, 2013, the Court issued an order denying without prejudice the plaintiffs' motion for class certification.
On January 24, 2014, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on February 4th.