PHILADELPHIA, March 28, 2014 /PRNewswire/ -- Cohen, Placitella & Roth, PC is investigating claims on behalf of investors who purchased: (1) Global Geophysical Services, Inc. common stock ("Global" or the "Company") (NYSE: GGS) between April 21, 2010 and February 18, 2014, inclusive ("Class Period") for violations of Sections 10(b) and 20(a) under the Securities Exchange Act of 1934; and (2) Global Series A preferred stock (NYSE: GGS-PA) in or traceable to Global's December 3, 2013 Registration Statement for violation of Sections 11 and 15 of the Securities Act of 1933. The investigation concerns whether Global and certain of its officers disseminated material false and/or misleading information in financial statements publicly disseminated in violation of the federal securities laws.
Global is a Texas corporation headquartered in Missouri City, Texas. Global and its subsidiaries purport to provide an integrated suite of seismic data solutions to the oil and gas industry worldwide. The Company states that its seismic data solutions consist primarily include seismic data acquisition, microseismic monitoring, data processing and interpretation services, which deliver data that enables the creation of high resolution images of the Earth's subsurface, and reveal complex structural and stratigraphic details.
During the Class Period, Defendants allegedly made false and/or misleading statements, and failed to disclose that; (i) for years 2009, 2010, 2011 2012 and the first three quarters of 2013, the Company's financial statements contained material misstatements that require restatement; (ii) the Company improperly recognized revenues during the relevant period; (iii) there were material weaknesses in the internal controls of the Company; and (iv) as a result of the foregoing, the Company's financial statements were materially false and misleading at the time they were issued and during the Class Period..
The accounting errors to be addressed in the restatements relate primarily to the following: (a) misapplication of a method of revenue recognition for certain contracts in the Latin America region, resulting in misallocation of revenue and costs between periods; (b) research and development costs that were inappropriately capitalized rather than expensed; (c) unrecorded sales and use tax liabilities; (d) unrecorded gains associated with insurance proceeds received in excess of the net book value of the insured assets during the third quarter of 2013; and (e) unrecorded stock based compensation expense associated with performance units granted during the third quarter of 2013.
On March 17, 2014, the Company issued a press release announcing that its financial statements and related auditor reports for the fiscal years ended December 31, 2012, 2011, 2010, and 2009, and the first, second and third quarters of 2013 should no longer be relied upon because of accounting errors resulting from material weaknesses in the Company's internal controls. Global further announced that it would conduct a thorough review of its financial statements from the foregoing years, and restate its consolidated financial statements from 2011 onward, as well as selected financial data for the 2009 and 2010 fiscal years in its 2013 Annual Report on Form 10-K.
On this news, shares of Global fell from $0.71 to $0.46 per share, or more than 60%, on unusually heavy trading volume, on March 18, 2014.
If you have any information on the ineffectiveness of the Company's internal control over financial reporting or the restatement or you wish to discuss your rights related to a loss in your investment in Global, please contact Eduardo A. Texidor, Jr. at firstname.lastname@example.org or, toll free, at 1-888-375-7600. For those investors inquiring via email, please be sure to include "Global Geophysical Services" in the subject line, the number of shares purchased, and your mailing address and telephone number.
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