A securities class action claim has been filed against an information solutions provider alleging that the company violated federal securities laws.
The law firm filed the class action filing against IDI, Inc., in the United States District Court for the Southern District of Florida on behalf of investors who purchased shares in the company during the class period between April 30, 2015 and July 21, 2015, due to alleged violations of the Securities Exchange Act of 1934, according to a press release. The suit alleges that the information solutions company made materially false and misleading statements about its business prospects.
IDI and its executive chairman’s hidden past legal problems led to a class action suit against the company.Executive chairman’s past legal issues undisclosed in biography
Specifically, the complaint states that IDI failed to disclose unfavorable information about Michael Brauser, who was elected to the company’s board on June 2, 2015, and later that month, on June 16, made executive chairman of the company. Several months earlier, while Brauser was a nominee for the board of directors, the IDI filed a proxy statement with the U.S. Securities Exchange Commission in connection with its annual shareholders meeting vote for members of the company board.
As a nominee, Brauser’s biography information was included in IDI’s proxy statement. However, the document failed to explain that he was named a defendant in civil fraud litigation, was the co-owner of company that filed for bankruptcy and was sued in a case related to that same firm.
“An adverse ruling in the suit against IDI could result in the firm’s stock being worthless.”
The class action complaint also alleges that IDI’s Form 10-Q for the quarterly period that ended March 31, 2015 – a disclosure of legal proceedings – was incomplete and misleading. The 10-Q explained that the company was being sued by TransUnion Risk and Alternative Data Solutions, Inc. However, it failed to mention that if the company lost, the ruling could have an immediate adverse impact on IDI’s future.
Article reveals Bauser and IDI’s legal issues, stocks fall
On July 21, 2015, Seekingalpha.com published an article that described Brauser’s past legal situations, as well as explained that an adverse ruling in the suit against IDI could result in the firm’s stock being worthless. The day that the story about Brauser and IDI was released, stock in the company fell $5.26 per share, or 46 percent, to close at $6.16 per share.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com