Feeds

Shareholder flings class action lawsuit at Groupon

Alleges site tricked investors into buying stock

Designing a Defense for Mobile Applications

The hits keep on coming for Groupon, as it now faces a shareholder lawsuit on top of another day of falling stocks, all over its materially weak accounting.

Groupon shares dropped another few per cent in New York trading yesterday and now sit at their lowest point ever: $15.02.

The stocks have been losing ground since the company had to restate its fourth quarter results at the end of last week due to something of an overstatement of its revenues and an understatement of its losses.

Rather foolishly, the daily deals site forgot that if it offered higher-priced deals, it should really keep back enough money to cover any possible refunds, which pushed its losses higher.

The Securities and Exchange Commission is already probing the incident, since the regulator is none too pleased with newly public companies messing up their accounts, and now a shareholder has launched a lawsuit over the snafu.

Investor Fan Zhang started the class action lawsuit for himself and others, alleging that Groupon's dodgy accounting practices had tricked investors into buying stocks.

"Defendants failed to disclose negative trends in Groupon’s business and made false statements as to Groupon’s financial results," Zhang's court filing read.

"As a result of these false statements, defendants were able to successfully accomplish Groupon’s IPO at $20.00 per share, and subsequently Groupon’s stock traded at artificially inflated prices… reaching a high of $26.19 per share on November 18, 2011."

The shareholder is looking for damages, interest, lawyer fees and anything else the court might award him and his fellow investors.

The Reg has contacted Groupon, which said it had no comment to make on the matter. ®

Application security programs and practises

More from The Register

next story
Yorkshire cops fail to grasp principle behind BT Fon Wi-Fi network
'Prevent people that are passing by to hook up to your network', pleads plod
Major problems beset UK ISP filth filters: But it's OK, nobody uses them
It's almost as though pr0n was actually rather popular
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
MPs wave through Blighty's 'EMERGENCY' surveillance laws
Only 49 politcos voted against DRIP bill
EU's top data cops to meet Google, Microsoft et al over 'right to be forgotten'
Plan to hammer out 'coherent' guidelines. Good luck chaps!
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.