A securities class action lawsuit was recently filed against a well-known tactical communications tracking company following claims the company and certain executives breached federal securities laws.
The class action suit was filed in the United States District Court for the Southern District of New York, on behalf of investors who purchased shares in Ability in the class period of September 8, 2015 to April 29, 2016, according to a press release. Ability bills itself as a “leading provider of innovative tactical communications intelligence solutions,” providing device tracking technology to law enforcement, military, intelligence agencies, and the like. In its history, such entities in more than 50 countries have worked with the company for its state of the art intelligence and data technology.
Details of the class action suit
The filing in this case specifically alleges that Ability and its executives failed to provide material information about its operations during the class period, in violation of federal law, the report said. These statements or omissions on the part of the company allegedly included overstating of income by not providing details on commissions, overstating “operating results” by improperly identifying certain revenues on sales, and not generally doing enough to have stringent controls over its financial reporting and disclosure.
Just after the end of the class period, but before the suit was filed, Ability announced on May 2 that it intended to restate all its financial statements for the period of 2012 to 2015. Investors who bought stock in the company during the class period have until July 25 to file lead plaintiff applications to join the class action.
The impact on investors
Just prior to the company’s announcement that it intended to restate financial details for the three-year period, its stock price was $7.32, according to Yahoo! Finance. When trading opened again after that weekend, and the announcement was made, its price dropped 33 percent in one day, closing May 2 at just $4.90. For the next few weeks, the company experienced far more downs than ups in this regard, with the stock price bottoming out at just $2.60 at close of trading on May 24. Since then, it has slowly but steadily rebounded, finishing July 7 at $4.09 per share. That number, however, is down significantly from the $9.90 seen at the end of last year.
In addition, it is worth noting that the company reported cash on hand of $24.2 million through the end of March, down only slightly from $25.8 million at the close of the year. Ability – which is based in Tel Aviv, Israel – termed the first quarter of the year as one of “operational and strategic progress” thanks to revenues of $6.5 million and a net loss of $242,000 thanks in large part to a $1.1 million tax accrual that is not expected to recur.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or firstname.lastname@example.org.