A securities class action suit was filed against a commercial aircraft leasing firm following allegations that it failed to disclose certain information to investors.
The lawsuit against FLY Leasing Limited was filed in the U.S. District Court for the Southern District of New York on behalf of investors who purchased stock in the company during the class period from May 8, 2014 through March 7, 2016, according to a press release. FLY leases commercial aircraft on long-term contracts to clients around the globe. The company has a fleet of 80 aircraft valued at around $2.6 billion and leases to 43 airlines.
Class action filing raises questions over FLY’s accounting policies
The class action filing claims that the aircraft leasing firm released false and misleading statements and/or failed to disclose information to investors. The lawsuit alleges that FLY did not utilize proper accounting practices in regard to intangible assets and liabilities for aircraft obtained with in-place leases during 2014 and 2015, a press release explained. As a result of these claims, that class action suit alleges that the defendants’ statements during the class period, about FLY’s business, prospects and operations, were false and misleading and/or lacked a reasonable basis.
Alleged issues with FLY’s accounting policies came up during the company’s discussions with the SEC.FLY and SEC discuss accounting practices
On March 8, 2016, FLY issued a press release detailing discussions between the company and the Securities and Exchange Commission. The firm and the SEC went over FLY’s accounting policies for business combinations, such as those for intangible assets and liabilities for aircraft acquired with in-place leases. FLY also revealed that if the SEC determined that the firm’s recognition of intangible assets was improper, its previously issued financial statements could be affected.
As a result, FLY noted, the aforementioned financial statements may require changes to its accounting for both 2016 and years prior. The aircraft leasing firm noted that due to the ongoing SEC discussions, there was a chance that its annual report on the Form 20-F for 2015 may not be filed on time. The class action suit claims that as a result of this disclosure, FLY securities fell and investors suffered significant harm.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.