CommVault Officers and Directors Under Investigation for Insider Trading
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 complete the form below or contact Kathryn Schubert at kschubert@schubertlawfirm or 415.788.4220.