USA: Morgan & Morgan Announces Filing of Class Action Against GLDD
Morgan & Morgan announces that a class action lawsuit has been commenced in the United States District Court for the Northern District of Illinois on behalf of all persons or entities that purchased the common stock of Great Lakes Dredge & Dock Corporation between August 7, 2012 and March 14, 2013, inclusive, alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers.
Great Lakes is the largest provider of dredging services in the United States. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company’s business, operations, and prospects. Specifically, the Complaint alleges that defendants concealed from the investing public that they had recognized revenue in a manner not consistent with the applicable accounting policy – certain pending change orders where client acceptance was not finalized were incorrectly included as revenue.
In addition, the Company failed to disclose material weaknesses in its internal controls to detect or prevent misstatements in its financial statements. As a result of defendants’ false and misleading statements, the Company’s stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on March 14, 2013, Great Lakes issued a press release announcing the restatement of its financials in which the Company’s previously-issued financial statements from the Second and Third Quarter of fiscal 2012 should no longer be relied upon. In addition, Great Lakes admitted that it expected to conclude that the Company had a “material weakness in its internal control over financial reporting,” and that it would not be able to timely file its 2012 annual financial results with the United States Securities and Exchange Commission.
On this news, shares in Great Lakes dropped almost 18%, closing at $7.36 per share on March 15, 2013, from a close of $8.97 per share on March 14, 2013, on volume of almost 8 million shares.
Press Release, March 25, 2013