SAN DIEGO and NEW YORK, Aug. 7, 2015 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that a securities fraud class action complaint was filed in the U.S. District Court for the Southern District of New York. The complaint alleges that officers and directors of MDC Partners, Inc. (NASDAQGS: MDCA) violated the Securities Exchange Act of 1934 between September 24, 2013 and April 27, 2015, by making materially false and misleading statements about MDC Partners' business prospects. MDC Partners provides marketing, activation, communications, and consulting solutions and services worldwide.
View this information on the law firm's Shareholder Rights Blog:
MDC Misrepresents its Financial Condition
According to the complaint, MDC officials failed to disclose that its executive compensation-related disclosures in its U.S. Securities and Exchange Commission ("SEC") filings materially understated the company's executive compensation, and that its reported goodwill was materially overstated. Additionally, the company's Forms 10-K and 10-Q failed to disclose then-known risks and events, its financial statements were presented in violation of Generally Accepted Accounting Principles, and its disclosure controls and internal controls over its financial reporting were materially deficient. The complaint further alleges that MDC officials lacked a reasonable basis for their positive statements about the company, its business prospects, and future operating performance, and thus caused its securities to be artificially inflated.
In a press release issued on April 27, 2015, MDC reported that the SEC had been conducting a formal investigation into the company's reporting of executive compensation and goodwill. MDC stated that it had formed a special committee of independent directors to review matters relating to the reimbursement of expenses incurred by the company's CEO, who agreed to repay the company $8.6 million as a result of improper related party transactions. The company also acknowledged that it was complying with the SEC's subpoena, which requested production of documents related to the company's accounting practices. On this news, MDC's stock plummeted $7.78 per share, or 27.8%, to close at $20.20 per share on April 28, 2015.
MDC Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP