NEW YORK, April 6, 2021 /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Leidos Holdings, Inc. ("Leidos" or the "Company") (NASDAQ: LDOS). Such investors are advised to contact Robert S. Willoughby at [email protected] or 888-476-6529, ext. 7980.
The investigation concerns whether Leidos and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
In May 2020, Leidos acquired the Security Detection and Automation ("SD&A") business of L3 Harris Technologies for $1 billion, representing to Company investors that the highly leveraged deal would help Leidos achieve double-digit growth, 15% margins, $500 million in revenues, and boost international sales. Then, on February 16, 2021, Spruce Point Capital Management ("Spruce Point") published a report concluding that Leidos had "wasted" $1 billion on the SD&A acquisition. The Spruce Point report alleges that Leidos is "potentially covering up at least $100m of fictitious sales, mischaracterizing $355 - $367m of international revenue" and that also "concealing numerous product defects from investors, including faulty explosive detection systems at airports, ports and borders." The Spruce Point report further asserts that the Company's management may be intentionally inflating certain of Leido's financial metrics, including operating cash flow and organic sales growth, to obscure strains from investors. For the foregoing reasons, among others, Spruce Point "an immediate Board investigation into the SD&A transaction and the dismissal of CEO [Roger A.] Krone and CFO [James C.] Reagan." Following publication of the Spruce Point report, Leidos's stock price fell sharply, damaging investors.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.
Robert S. Willoughby
888-476-6529 ext. 7980
SOURCE Pomerantz LLP