According to the law firm press release, the Complaint alleges that throughout the Class Period, Defendants issued as series of materially false and misleading statements regarding the Company’s revenues and operations, by failing to disclose that: (i) the Company did not properly execute its plan to move to a more subscriptions-based service model; (ii) past acquisitions had masked the Company’s sharply declining revenue base; (iii) the Company was inappropriately recognizing revenues from distributors in periods where such revenues should have been deferred; (iv) the Company lacked adequate internal and financial controls; and (v) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
On February 4, 2013, the Company announced the retirement of its Chief Financial Officer (“CFO”), as well as its Vice Chairman. Defendant was named as the Company’s new CFO. On this news, VeriFone stock declined $0.87 per share or nearly 2.5%, to close at $34.37 per share.
On February 20, 2013, the Company announced its preliminary financial results for the first fiscal quarter ended January 31, 2013. The Company announced that it expected first quarter adjusted earnings to be between $0.47 to $0.57 per share on revenue of $424 million, falling well below analysts’ profit forecast of $0.73 per share on revenue of $492 million. The Company also announced a new revenue recognition policy which prevented it from recognizing revenues that quarter from distributors in the Middle East and Africa.
On this news, shareholders hammered VeriFone’s share price, causing it to spiral $13.65 per share or nearly 43%, to close at $18.24 per share on February 21, 2013.
On October 7, 2013, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel. On December 16th, the Lead Plaintiff filed an amended complaint.
On March 29, 2016, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to file an amended complaint. Plaintiffs did not file an amended complaint, thus Judgment was entered in favor of Defendants on June 6.