Shareholder Class-Action Lawsuit Filed Against EFI
Law360 reports that a shareholder class-action lawsuit was filed in New Jersey federal court last week against Electronics for Imaging (EFI) claiming that EFI “deceived investors by failing to inform them of faulty accounting practices.”
Anthony Pipitone, an EFI shareholder alleges that EFI and its CEO and financial officers, Guy Gecht and Marc Olin, respectively, “deceived investors by not disclosing problems with EFI’s tally of certain large-printer sales, leading to a 45-percent drop in the company’s share price after news of the internal investigation became public.”
The complaint states that EFI company and its executives allegedly misled investors about how “(1) the company was improperly recognizing revenue; (2) the company’s disclosure controls and procedures were not effective; (3) the company’s internal control over financial reporting were not effective; and (4) as a result, the company’s public statements were materially false and misleading at all relevant time.”.
The complaint cites allegedly misleading statements in a Form 10-K filed in February and Form 10-Q filed in May that said EFI’s internal financial reporting controls were adequate. However, the complaint states that those statements were contradicted by EFI’s August 3rd press release delaying an earnings call for the second quarter in which the company said it would need to assess its financial reporting concerning certain sales categories, the shareholders allege.
“The assessment is related to certain transactions where a customer signed a sales contract for one or more large format printers and was invoiced, and the printer(s) were stored at a third-party in-transit warehouse prior to delivery to the end-user,” the EFI press release stated.
This announcement is said to have caused EFI’s share price to drop to $21.61 from the previous day’s close of $26.05, and “the executives knowingly made the false statements attesting to accounting controls, which inflated the share price, according to the suit.”
The suit seeks to cover shareholders who held EFI shares from February 22 through August 3, and makes two claims under the Securities Exchange Act and a related U.S. Securities and Exchange Commission regulation.
Pipitone and the shareholders are represented by Laurence M. Rosen of The Rosen Law Firm PA. The case is Pipitone v. Electronics For Imaging Inc. et al., case number 2:17-cv-05992, in the U.S. District Court for the District of New Jersey.
- April 2017: EFI Reports Robust Net Income for First-Quarter 2017
- February 2017: Xerox Sells FreeFlow Print Server Business to EFI
- October 2016: EFI Revenue up 7 Percent, Net Income up 76 Percent
- July 2016: EFI Second-Quarter Revenue up 21 Percent to $264 Million, But Net Income Slides
- June 2016: EFI Acquires Optitex in Bid to Extend Marketshare in Textile-Printing Industry
- April 2016: EFI: Record First-Quarter Revenue of $234 Million, up 20 Percent
- January 2016: ‘Record Revevue’ for EFI’s Fourth-Quarter, but Net Income Down
- October 2015: Revenue, Net Income Continue Upward Trend for EFI’s Third Quarter
- July 2015: EFI Makes Two Key Acquisitions; Launches New Fiery Server
- July 2015: EFI Reports Record Revenue of $203 Million, Net-Income Gains
- April 2015: EFI Reports Record First Quarter Revenue of $195 Million
- January 2015: EFI REPORTS RECORD REVENUE FOR FOURTH QUARTER AND FULL-YEAR 2014