A securities class action suit was filed against a software company following claims that it improperly attempted to bribe foreign government officials.
The lawsuit against PTC Inc. was filed in the U.S. District Court for the District of Massachusetts on behalf of investors who purchased shares in the company during the class period from Nov. 24, 2011 and July 29, 2015, according to a press release.
PTC develops 2D and 3D design software solutions. In addition, the company offers product lifecycle management and service management solutions. PTC works with around 28,000 businesses in the manufacturing industry in an effort to aid the technological evolution of the sector. The lawsuit concerns allegations that the company bribed certain Chinese government officials.
“The lawsuit alleges that PTC was not cooperating with the DOJ and the SEC.”
Class action suit claims PTC China bribed officials
The class action filing claims that the defendants released false and misleading statements and/or failed to disclose certain information to investors. The lawsuit makes allegations that PTC failed to inform both the Securities Exchange Commission and the Department of Justice of the results of its investigation into PTC China. The company had looked into whether the Chinese division offered recreational travel to Chinese government officials in violation of the Foreign Corrupt Practices Act of 1977.
In addition, the lawsuit alleges that PTC was not cooperating with the DOJ and the SEC on their own investigations into whether Chinese government officials improperly benefited from PTC China bribes. The class action suit also claimed that PTC’s books and records were unreliable. It alleged that the company did not maintain proper internal controls over its accounting practices. As a result, the class action complaint alleges that the defendants’ statements to investors were materially false and misleading during the class period.
PTC discloses improper trips for Chinese officials
On Feb. 16, 2016, PTC announced it had reached an agreement with the DOJ and SEC concerning the allegations that the company bribed Chinese government officials with perks such as recreational travel accommodations in an effort to get favorable contracts. The company paid the government a penalty of $28.2 million, including interest. In addition, it admitted that two of its units improperly set up recreational trips to the U.S. for Chinese officials. The trips were offered in exchange for favorable contracts with state-owned entities.
After news of the bribes was disclosed, PTC share prices fell substantially, which caused significant damage to investors.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.