According to the law firm press release, CTPartners provides retained executive search services. CTPartners facilitates the recruitment and hiring of “C-level” executives, other senior executives and board members.
The complaint alleges that during the Class Period, defendants repeatedly highlighted the Company’s reputation within the industries in which it operated based on the “integrity” of its employees and on the strength and qualifications of its search consultants. Further, the Company represented that these consultants were promoted based on “objective” and “transparent” criteria related to their merits, and that this purported meritocracy had been and would be a key to the Company’s ongoing success. Defendants, however, failed to disclose that CTPartners allegedly operated as a “den of discrimination” that subjected employees to crude, improper and discriminatory practices, which threatened the Company’s ability to raise capital, retain employees or successfully execute its core business functions. As a result of defendants’ false statements, CTPartners common stock traded at artificially inflated prices during the Class Period, reaching a high of $23.15 per share on November 12, 2014.
On December 8, 2014, an article in The New York Post reported that an “explosive” complaint had been filed with the Equal Employment Opportunity Committee by a former CTPartners employee, which reportedly detailed CTPartners as “a den of discrimination where women are stripped of profitable accounts, held to a higher standard than their male colleagues and subjected to lewd behavior.” That same day, CTPartners withdrew a stock offering that had been announced less than 24 hours earlier. As a result of this news, the price of CTPartners stock dropped $4.50 per share, a decline of 24% from the prior closing price.
On January 21, 2015, CTPartners announced disappointing preliminary fourth quarter and full fiscal year 2014 financial results, including earnings per share that came in well below the Company’s original guidance. CTPartners stated the miss was due to over $1.3 million in purportedly unanticipated expenses related to increased management, administrative and business development costs. On this news, the price of CTPartners stock dropped $3.63 per share, a one-day decline of more than 29%.
Then, on January 28, 2015, CTPartners withdrew its preliminary fourth quarter and year-end guidance provided only one week earlier and revised downward its earnings guidance for the first quarter and full fiscal year 2015. The Company stated that the downward revision was due to a $1.7 million increase in “compensation expense” for employee bonuses. In addition, CTPartners again withdrew a proposed stock offering, this one announced only two days prior. On this news, the price of CTPartners stock dropped $2.17 per share to close at $4.35 per share on January 29, 2015, a one-day decline of more than 33%.
On May 18, 2015, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed an amended complaint on June 15.
On March 29, 2016, the Court issued an Order granting Defendants' motion to dismiss. This case was closed.