Two More Law Firms ‘Investigating’ Alleged Lexmark Securities-Law Violations; Layoffs at Perceptive
Yesterday, the law firm Glancy Prongay & Murray announced it’s investigating Lexmark International concerning “its officers’ possible violations of federal securities laws.” At least five law firms are currently alleging that Lexmark misled investors by stating that the growth of its supplies for its printers and copier/MFPs was due to end-user demand, when in fact, the law firms allege that supplies growth was actually due to price increases for supplies, and customers purchasing supplies before price increases went into effect.
The Glancy Prongay & Murray investigation is said to involve whether Lexmark “adequately disclosed sharp declines in its revenues” for its second quarter of 2015. On July 21, 2015, it says, Lexmark reported poor results for its second quarter of 2015 ,and lowered its 2015 sales guidance. According to Glancy Prongay & Murray, Lexmark “said its supplies growth (for Lexmark printers and MFPs) was not attributable to end-user demand, but rather (to) the result of its European customers buying ahead of customary price increases which produced excessive inventory.”
Yesterday, the New York law form Bronstein, Gewirtz & Grossman issued a press released stating that it’s “investigating potential claims on behalf of purchasers of Lexmark…” with “the investigation concerning whether Lexmark and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.”
According to Bronstein, Gewirtz & Grossman: “On July 21, 2015, Lexmark revealed poor financial and operating results for its second quarter of 2015 and lowered its full-year 2015 sales guidance, citing lower-than-expected supplies revenue from its European wholesale distributors. The company also said that it was enduring ‘ongoing headwinds from the strong U.S. dollar and near-term laser supplies channel optimization.’ Following this news, Lexmark stock dropped $9.57 per share, or 20.2%, to close at $37.75 on July 21, 2015.”
Also on July 24, 2017, the law firm Kahn Swick & Foti and partner, former Attorney General of Louisiana, Charles C. Foti, Jr., issued a press release “reminding investors that they have until September 19, 2017 to file lead plaintiff applications in a securities class-action lawsuit against Lexmark if they purchased the company’s securities between August 1, 2014 and July 20, 2015. This action is pending in the United States District Court for the Southern District of New York.
According to the Kahn Swick & Foti lawsuit: “Lexmark and certain of its executives are charged with failing to disclose material information … violating federal securities laws.” The firm charges that “the alleged false and misleading statements and omissions include, but are not limited to, that: (i) there were significant declines in demand and growth for the company’s supplies business; (ii) supplies revenue growth was not caused primarily by demand, but by advance buying ahead of scheduled price increases; (iii) this buying practice resulted in excessive inventory levels at its wholesale distributors; and (iv) as a result of the foregoing, Lexmark’s financial statements were materially false and misleading at all relevant times.”
Also on July 24th, Lundin Law PC, a shareholder-rights legal firm, also reported that it’s filed a class-action lawsuit against Lexmark, alleging that Lexmark misled investors by stating that the growth of its supplies for its printers and MFPs was due to end-user demand, when in fact, the complaint alleges that supplies growth was actually due to price increases for supplies, and customers purchasing supplies before price increases went into effect.
In June 2017, the Labaton Sucharow law firm also filed a securities class-action lawsuit against Lexmark on behalf of its client, the Oklahoma Firefighters Pension and Retirement System, alleging that Lexmark “violated provisions of the Exchange Act by issuing false and misleading statements regarding the company’s end-user demand, channel inventory, and growth prospects for its high-margin supplies business.”
Perceptive Software Lay-Offs
Meanwhile, The Kansas City Star reports that an undisclosed number of software workers at Perceptive Software in Lenexa, Kansas, were let go on Friday following Lexmark’s sale of its Perceptive Software.
Earlier this month, Lexmark, sold Perceptive Software, Kofax, and ReadSoft to private-investment firm Thoma Bravo, which then merged Perceptive Software with another Thoma Bravo company, Hyland Software.
Hyland spokeswoman Alexa Marinos said the company acquired Perceptive’s product line and 700 Perceptive employees, including 300 in Lenexa. She told The Kansas City Star that the move included “employee separations” but declined to say how many were let go, or how many worked for Perceptive Software in Lenexa before the cuts.
- July 2017: Hyland Completes Takeover of Lexmark’s Perceptive
- July 2017: Thoma Bravo Acquires Lexmark Software Business; Perceptive Acquired by Hyland
- June 2017: Lexmark CEO Reeder Resigns Citing ‘Personal Reasons’
- December 2016: Apex Technology Says Lexmark Acquisition Will Help it Create Global Printer Empire
- November 2016: It’s Official: Lexmark Acquired by Apex and Investors; Reeder Named CEO
- October 2016: Revenues Flat for Lexmark as Apex Technology Acquisition on the Horizon