Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the District of Massachusetts on behalf of all persons or entities that purchased the common stock of ModusLink Global Solutions, Inc. (“ModusLink” or the “Company”) (NASDAQ GS: MLNK) between September 26, 2007 and June 8, 2012, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
If you purchased shares of ModusLink during the Class Period, or purchased shares prior to the Class Period and still hold ModusLink, and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to email@example.com, or at: http://www.rigrodskylong.com/investigations/moduslink-global-solutions-inc-mlnk.
ModusLink, a Delaware corporation headquartered in Waltham, Massachusetts, through its subsidiaries, is a leader in global supple chain business process management serving technology-based clients in the computing, software, consumer electronics, storage and communications markets. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations and prospects. Specifically, the Complaint alleges that the Defendants failed to disclose: (i) that the Company’s accounting for rebates associated with volume discounts provided by vendors was improper and misleading; (ii) that the Company’s financial statements during the Class Period did not provide a fair representation of the Company’s finances and operations; (iii) that, as a result, the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (iv) that the Company lacked adequate internal and financial controls; and (v) that, as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times. As a result of defendants’ false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on June 11, 2012, the Company’s announced in a press release that it received an inquiry from the Securities and Exchange Commission regarding the Company’s treatment of rebates associated with volume discounts provided by vendors. Concurrent with the inquiry, the Audit Committee of the Company’s Board of Directors initiated an internal investigation and had determined that certain client contracts have not been aligned consistently with ModusLink’s practice of retaining volume discounts. In the course of this investigation, the Audit Committee also identified limited instances where vendor costs incurred were marked-up to clients in a manner not consistent with client contracts.
Based on the preliminary results of the Company’s accounting evaluation done in connection with the investigation, however, the Company believed it was no longer able to conclude that amounts from such volume discounts and mark-ups, where now found to be inconsistent with client contracts, were correctly accounted for as revenue. The Company said that it expects to restate its audited financial statement from fiscal years 2009 through 2011, as well as the first two quarters of fiscal 2012 and its unaudited selected financial data for fiscal years 2007 and 2008. And as a result of the restatement, the Company expects to report downward adjustments to revenue of approximately $20 million to $30 million over a period in which aggregate reported revenue was $5.4 billion and aggregate reported net loss was $213 million, inclusive of $232 million of impairments related to goodwill and intangible assets. In addition, the Company expects that the restatement will negatively impact net income, by a lesser amount. On this news, the price of ModusLink’s stock declined over 34%, closing at $2.78 per share on June 11, 2012.
If you wish to serve as lead plaintiff, you must move the Court no later than August 13, 2012. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.
Attorney advertising. Prior results do not guarantee a similar outcome.
Timothy J. MacFall, Esquire
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