Xerox Spin-Off Hit with Class-Action Lawsuit
Xerox spin-off Conduent has been hit with securities class-action lawsuit in the U.S. District Court for the District of New Jersey, with the lawsuit alleging that Conduent and key officers in withheld key information from investors. The lawsuit alleges violations of Sections 10(b) and 20(a) of the U.S. Securities Exchange Act of 1934.
On November 7, 2018, Conduent reported negative third-quarter and fourth-quarter projected operating results due to “continued suboptimal performance from an inherited legacy technology vendor…stem[ming] from the vendor’s inability to deliver on service level agreements, lack of responsiveness to Conduent’s needs, and poorly structured contract which we inherited” Further, an “outdated and historically under-invested legacy IT infrastructure has caused major disruptions to our operations and impacted clients and delivery performance.” The result was a sharp decline in the price of Conduent shares – from approximately $20 per share to $13 per share. Today, Conduent is trading at $14.30 per share.
Those who purchased Conduent shares between February 21, 2018 and November 6, 2018 are eligible to join the class-action lawsuit.
Conduent, Inc., which is headquartered in New Jersey, is a business-process services company that was split off from Xerox in 2017, and is a separate company from Xerox. It is essentially comprised of Affiliated Computer Services, which Xerox purchased in 2010 under then-CEO Urusla Burns. Investor activist Carl Icahn – who was instrumental in derailing Xerox’s complicated merger deal with Fujifilm – owns approximately 10 percent of Conduent stock.