Hagens Berman Investigates Groupon Following Restatement of Financial Results and Admitted Material Weakness of Its Internal Controls
BERKELEY, Calif., March 30, 2012 /PRNewswire/ -- Hagens Berman today announced it is investigating Groupon (NASDAQ GS: GRPN) following the company's restatement of its fourth quarter, 2011 financial results and admitted material weaknesses in its internal controls.
Investors who purchased or otherwise acquired shares of Groupon common stock and who suffered losses exceeding $100,000 are encouraged to contact Hagens Berman Partner Reed Kathrein by calling (510) 725-3000. Mr. Kathrein is leading Hagens Berman's investigation. Investors may also contact the firm via email at GRPN@hbsslaw.com or by visiting www.hbsslaw.com/GRPN.
On March 30, 2012, Groupon announced that it was revising its fourth quarter financial results for the year ending on December 31, 2011.
A press release issued by Groupon noted that "In conjunction with the completion of the audit of Groupon's financial statements for the year ended December 31, 2011 by its independent auditor, Ernst & Young LLP, the Company included a statement of a material weakness in its internal controls over its financial statement close process in its Annual Report on Form 10-K for year ended December 31, 2011."
The company has admitted that in connection with its year end close, just weeks after its Initial Public Offering it:
- failed to maintain a financial closing process and procedures that were adequately designed, documented and executed to support the accurate and timely reporting of financial results;
- failed to maintain effective controls to provide reasonable assurance that accounts were complete and accurate and agreed to detailed support, and that account reconciliations were properly performed, reviewed and approved;
- failed to have adequate policies and procedures in place to ensure the timely, effective review of estimates, assumptions and related reconciliations and analyses, including those related to customer refund reserves.
Groupon admits that these weaknesses were material. "It defies credibility that the admitted internal control deficiencies existed just at year end," said Mr. Kathrein. "Disclosure of any such weaknesses in the prospectus and registration statement would have likely driven investors away."
Hagens Berman is investigating whether these internal control deficiencies existed at the time of the public offering and whether the company violated securities laws by failing to disclose issues to investors. The company went public in November 2011.
Persons with knowledge that may help the investigation are encouraged to contact the firm. The SEC recently finalized new rules as part of its implementation of the whistleblower provisions in the Dodd-Frank Wall Street Reform Bill. The new rules protect whistleblowers from employer retaliation and allow the SEC to reward those who provide information leading to a successful enforcement with up to 30 percent of the recovery.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in 10 cities. The firm represents whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com. The firm's securities law blog is at www.meaningfuldisclosure.com.
Media Contact: Mark Firmani, Firmani + Associates, (206) 443 9357, Mark@firmani.com
SOURCE Hagens Berman Sobol Shapiro LLP