CommVault Officers and Directors Under Investigation

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Shareholder and consumer rights law firm Schubert Jonckheer & Kolbe LLP has launched an investigation into whether certain officers and directors of CommVault Systems, Inc. (NASDAQ: CVLT) breached their fiduciary duties to the company by insider trading and failing to implement adequate internal controls over financial accounting and disclosure procedures.

According to a securities action pending against the company in the U.S. District Court for the District of New Jersey, the company, its CEO and CFO improperly deferred revenue recognition to create the illusion that CommVault was a high growth company when, in fact, it was not. The class action alleges that the Company and its top executives engaged in a practice known as “cookie jar” accounting in violation of Generally Accepted Accounting Principles by creating a “cookie jar” of deferred revenue to dip into when earnings were lower than projected.

During the class period (May 7, 2013 to April 24, 2014), defendants are alleged to have falsely reassured the investing public that revenue was on target. During this period, defendant CEO N. Robert Hammer sold more than 268,500 of his own CommVault shares for proceeds of more than $18.6 million. When the company’s real revenue misses were revealed on April 25, 2014,  CommVault’s stock plummeted from $68.58 per share to $47.56 per share, a decline of over 30% which wiped out nearly $1 billion of market value.

On September 30, 2016, U.S. District Judge Peter Sheridan denied CommVault’s motion to dismiss the securities action, which may expose the company to millions of dollars in damages, as well as investigatory and litigation costs.

Concerned shareholders who would like more information about their rights and potential remedies should contact Kathryn Schubert via email at kschubert@schubertlawfirm or by telephone at (415) 788-4220, or fill out the form (at right).

 

Roger Ailes, Fox News, and Issues of Corporate Governance

Photo by Frederick M. Brown/Getty Images Entertainment / Getty Images
Photo by Frederick M. Brown/Getty Images Entertainment / Getty Images

Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of the shareholders of Twenty-First Century Fox, Inc. (NASDAQ: FOX), related to allegations that Roger Ailes sexually harassed and assaulted women for decades. The investigation concerns whether the company’s officers and directors breached their fiduciary duties by failing to stop or prevent Mr. Ailes’s inappropriate behavior and the company’s alleged culture of misogyny.

On July 6, 2016, former Fox News anchor Gretchen Carlson filed a sexual harassment lawsuit against Mr. Ailes alleging that Mr. Ailes terminated her as retaliation for refusing his sexual advances. Then, on July 19, reports surfaced that Ailes made “unwanted sexual advances” toward Fox News anchor Megyn Kelly at the start of her career. Andrea Tantaros, host of The Five, filed a lawsuit in August against Fox News, Ailes, and several other high level executives (including Bill Shine) alleging numerous instances of sexual harassment and inappropriate comments. In total, more than twenty women have come forward claiming similar mistreatment and alleging that the women of Fox News routinely had to sleep with their managers — in many cases, Roger Ailes — in exchange for promotions.

In the wake of the scandal, Mr. Ailes resigned on July 21, 2016, receiving a $40 million exit package. In September, Fox settled Gretchen Carlson’s lawsuit for $20 million. Mr. Ailes did not contribute to the settlement, although he was the sole defendant named in the lawsuit.

Mr. Ailes’s behavior has already exposed the company to significant civil liability and may further cause harm to the company and its shareholders as key personnel leave the network. Many Fox news anchors have “key man” clauses in their contracts letting them out of their contracts following Mr. Ailes’s departure. Longtime news anchor Greta Van Susteren used such a “key man” provision when she abruptly left the network in September.

The company’s officers and directors may have breached their fiduciary duties by failing to conduct an investigation into the conduct of other senior executives who allegedly conspired with Ailes to cover up his transgressions. This includes Bill Shine, Senior Executive Vice President of Programming, who was promoted to Co-President of Fox News and extended a long-term contract following the scandal, despite reports that he helped facilitate and conceal Ailes’s behavior. The company’s officers and directors may be responsible for causing significant financial and reputational harm to the company.

If you currently own stock in Twenty-First Century Fox, Inc. and wish to obtain additional information about our investigation and your legal rights, please contact Kathryn Schubert via email at kschubert@schubertlawfirm.com or by telephone at (415) 788-4220, or fill out the form (at right).

 

Puma Biotechnology Executives Under Investigation

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Shareholder and consumer rights law firm Schubert Jonckheer & Kolbe LLP is investigating potential claims on behalf of shareholders of Puma Biotechnology, Inc. (NYSE: PBYI) related to the company’s statements regarding its breast cancer drug, neratinib.

The investigation concerns whether Puma Biotechnology’s officers and directors breached their fiduciary duties by making false and misleading statements to shareholders and the market regarding neratinib clinical trial results between July 22, 2014 and May 29, 2015. Specifically, Puma Biotechnology claimed that patients treated with neratinib “resulted in a 33% improvement in disease free survival versus placebo.” During this period, Puma Biotechnology’s officers and directors may have known the truth – that neratinib treatment only resulted in modest benefits as compared to placebo – while the company’s Chief Executive Officer and Senior Vice President of Finance and Administration and Treasurer together collected more than $23 million in performance-based compensation.

Puma Biotechnology’s officers and directors’ statements may have exposed the company to significant civil liability. The company currently faces a class action lawsuit alleging that Puma Biotechnology knew about neratinib’s modest health benefits and concealed these facts from the public. On September 30, 2016, U.S. District Judge Andrew J. Guilford denied Puma Biotechnology’s motion to dismiss the class action, which may expose the company to millions of dollars in damages, as well as investigatory and litigation costs related to defending the action.

If you currently own stock in Puma Biotechnology and wish to obtain additional information about our investigation and your legal rights, please contact Dustin Schubert either via email at dschubert@schubertlawfirm.com or by telephone at (415) 788-4220, or fill out the form at right.

Energy Recovery Executives Under Investigation

We have launched an investigation into whether certain officers and directors of Energy Recovery, Inc. (NASDAQ: ERII) breached their fiduciary duties by making false and misleading statements to shareholders and the market. Energy Recovery provides energy solutions to industrial fluid flow markets by converting wasted pressure energy into reusable assets and preserving or eliminating pumping technology in hostile processing environments.

On January 27, 2016 the United States District Court for the Northern District of California upheld securities fraud class action claims against Energy Recovery and certain of its officers and directors regarding contractual negotiations with a prospective client. The Court found that former Chief Executive Officer Thomas S. Rooney, Jr. acted with “deliberate or conscious recklessness” in telling investors that Energy Recovery had secured a verbal agreement with a prospective client. The amended complaint filed in the class action on May 26, 2016 alleges additional violations of the federal securities laws during the period March 7, 2013 through March 5, 2015. Specifically, defendants are alleged to have made false and misleading statements regarding contractual negotiations with multiple prospective clients, commercial interest in oil and gas products, and the operability of core Energy Recovery products, causing the stock price to be artificially inflated.

Schubert Jonckheer & Kolbe's investigation concerns when and how much certain of Energy Recovery’s officers and directors knew or should have known of the false and misleading statements, and whether any corporate insider sold stock based on non-public information. Shareholders interested in seeking the recovery of damages on behalf of the company and securing other remedial measures should contact the firm.

Concerned shareholders who would like more information about their rights and potential remedies should contact Dustin Schubert via email at dschubert@schubertlawfirm.com or by telephone at (415) 788-4220, or fill out the form (at right). 

If You Bought A Near East Brand Product, You May Have a Legal Claim

Schubert Jonckheer & Kolbe LLP is investigating whether Near East brand food products, including rice pilaf, couscous and quinoa mixes, violate federal and/or California law prohibiting manufacturers from packaging food in misleadingly large containers. 

Both federal and California state law prohibit deceptive packaging.  Packaging can be deceptive even if the volume of the product contained therein is stated on the label, if the package as a whole is designed to mislead consumers into overestimating the amount of the contents.  Specifically, containers that do not allow consumers to view the contents of the packaging, and which contain “nonfunctional slack fill” are unlawful under both federal and California law.  21 CFR 100.100; Cal. Bus. & Prof. Code Sections 12601-12615.5. 

“Slack fill” is the difference between the capacity of a container and the actual volume of the product it contains.  In some cases “slack fill” may be lawful.  For example, when the contents of a package settle through ordinary handling, the container may be slightly less than full by the time the consumer opens it.  However, when the “slack fill” is not due to ordinary subsidence or some other functional purpose, it is unlawful.  Consumers who purchase products containing slack fill may be entitled to restitution or damages.

If you purchased a Near East brand product, and believe that the product was sold in a box with “nonfunctional slack fill,” you may have a legal claim.  Please fill out the form at right for a free legal consultation.

LendingClub Executives Under Investigation

We are investigating whether certain officers and directors of LendingClub Corporation (NYSE: LC) breached their fiduciary duties to the company and its shareholders by failing to implement adequate internal controls over financial reporting and disclosure procedures.

The investigation concerns the abrupt resignation of former Chairman and Chief Executive Officer Renaud Laplanche on May 9, 2016, and the truth revealed in the aftermath of his resignation. Following Laplanche’s resignation, the company announced that (1) it sold loans to an institutional investor that did not meet that investor’s standards, a violation of the company’s purported internal controls, and (2) the company had invested in Cirrix Capital LP, an entity that purchased loans on the LC platform in direct contradiction of the Company’s representations that it did not assume credit risk in loans facilitated by its marketplace. The following day Goldmann Sachs Group Inc. and Jeffries LLC stopped buying loans on the platform, potentially jeopardizing future securitization deals for the company. 

Following these announcements, LC shares plummeted, dropping more than 50% in one week and losing over $1.3 billion in market value. The stock now trades at less than 25% of its IPO price. 

In filings made with the U.S. Securities and Exchange Commission (the “SEC”), the Company admits that it suffered “material weaknesses in internal control over financial reporting” and that its “disclosure procedures were not effective, and were not operating at a reasonable assurance level as of December 31, 2015.” The company is now the subject of class action litigation and governmental and regulatory investigations arising from the matter.

Concerned shareholders who would like more information about their rights and potential remedies should contact Kathryn Schubert via email at kschubert@schubertlawfirm or by telephone at (415) 788-4220, or fill out the form (at right).