(NASDAQ GS: TEUM)
Attention investors who purchased shares of Pareteum Corporation between March 12, 2019 and October 21, 2019:
Rigrodsky & Long is investigating claims brought in a securities fraud class action complaint against Pareteum Corporation ("Pareteum") concerning whether Pareteum and certain of the Company's directors and/or officers made materially false and misleading statements and failed to disclose materially adverse facts during the period March 12, 2019 and October 21, 2019, inclusive (the "Class Period"), concerning Pareteum's business, operations and prospects. These misrepresentations and omissions artificially inflated the price of Pareteum's stock throughout the Class Period.
Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the Southern District of New York on behalf of all persons or entities that purchased the common stock of Pareteum Corporation (“Pareteum” or the “Company”) (NASDAQ GS: TEUM) between March 12, 2019 and October 21, 2019, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
If you purchased shares of Pareteum during the Class Period, or purchased shares prior to the Class Period and still hold Pareteum, and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Seth D. Rigrodsky or Timothy J. MacFall at Rigrodsky & Long, P.A., 300 Delaware Avenue, Suite 1220, Wilmington, DE 19801, by telephone at (888) 969-4242, by e-mail at email@example.com, or at http://rigrodskylong.com/contact-us/.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public: (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. As a result of defendants’ alleged false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on June 7, 2019, Marcus Aurelius Value published a report questioning the Company’s accounting regarding backlog, backlog conversion rates, and receivables. 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 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.
Finally, 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, shares of Pareteum fell over 59%, closing at $0.30 per share on October 22, 2019, on heavy trading volume.
If you wish to serve as lead plaintiff, you must move the Court no later than December 23, 2019. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Rigrodsky & Long, P.A., with offices in Delaware, New York, and California, has recovered hundreds of millions of dollars on behalf of investors and achieved substantial corporate governance reforms in numerous cases nationwide, including federal securities fraud actions, shareholder class actions, and shareholder derivative actions.
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