ComScore, Inc. Securities Litigation
|Court:||U.S. District Court for the Southern District of New York|
|Judge:||The Hon. John G. Koeltl|
|Class Period:||05/05/2015 - 03/07/2016|
|Case Contacts:||John C. Browne, Jai K. Chandrasekhar, Jesse L. Jensen|
This is a securities fraud class action filed on behalf of a class of persons and entities who purchased or acquired comScore, Inc. (“comScore” or the “Company”) securities between February 11, 2014 through November 23, 2016, inclusive (the "Class Period"). This action alleges that comScore—a provider of data, metrics, products and services to clients in the media, advertising, and marketing industries—and certain of its senior officers (collectively, “Defendants”) defrauded investors by engaging in an accounting fraud that resulted in the overstatement of revenue and other important financial metrics.
Plaintiffs claim that throughout the class period, comScore made materially false and misleading statements to investors by reporting positive financial results, touting “record revenues, strong profitability and net income from operations,” and assuring investors that adequate financial and disclosure controls and procedures were in place to ensure the accuracy of its financial statements. However, the truth about the Company’s fiscal position and its fraudulent accounting practices began to unfold following comScore’s March 7, 2016 announcement that it would not file its Form 10-K due to an internal review of its financial statements by its Audit Committee and independent public accountants initiated after receiving “a message regarding certain potential accounting matters.” The company also suspended its share repurchase program. This news rattled investors and caused the price of comScore stock to fall 33.5%.
Thereafter, on September 15, 2016, comScore disclosed that it would restate its publicly reported financial statements for a period of more than three years, an admission that those statements were materially false and misleading, violated Generally Accepted Accounting Principles (“GAAP”), and improperly recognized more than $43 million in fictitious revenues. Then, on November 23, 2016, comScore disclosed that it would be making additional revenue adjustments and moreover that it suffered from serious internal controls deficiencies, including “concerns about tone at the top” and “the failure to provide information to the Company’s accounting group and its external auditors.”
In response to this news, which the Wall Street Journal described as a “pre-Thanksgiving turkey,” comScore’s battered share price dropped another 5%, closing at just $28.94 per share on November 25, 2016—a significant fall from a Class Period high of more than $64 per share.
On December 28, 2017, the parties entered into the Stipulation and Agreement of Settlement setting forth the terms and conditions of the proposed settlement of this Action for $110,000,000.00, with $27,231,527.20 paid in cash and $82,768,472.80 paid in shares of comScore common stock ( (the “Settlement”). Following a hearing on June 7, 2018, the Court entered the Judgment finally approving the Settlement and resolving all remaining claims in the Action. The Court also entered separate Orders approving the proposed Plan of Allocation for the proceeds of the Settlement and awarding Plaintiffs’ Counsel attorneys’ fees and reimbursement of Litigation Expenses.
More information about the Settlement can be found at: www.comScoreSecuritiesLitigation.com.
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