Central European Distribution Corp (NASDAQ:CEDC) Investor Files Class Action Lawsuit over Alleged Securities Laws Violations
June 11, 2012 (Shareholders Foundation) -- An investor in NASDAQ:CEDC shares filed a lawsuit in the U.S. District Court, Southern District of New York, against Central European Distribution Corp over alleged Violations of Federal Securities Laws in connection with certain statements over its subsidiary in Russia.
According to the complaint the plaintiff alleges on behalf of all persons who purchased or otherwise acquired Central European Distribution Corp (NASDAQ:CEDC) securities between March 1, 2010 and June 4, 2012, that Central European Distribution Corp and certain of its top officials violated the Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated. Specifically the plaintiff claims that defendants allegedly made false and/or misleading statements, as well as failed to disclose that Central European Distribution Corp's reported net sales in the years ended December 31, 2010 and 2011 were materially inflated, that as a result of its alleged failure to appropriately account for customer rebates, Central European Distribution Corp anticipates restating its reported consolidated net sales, operating profit and related accounts receivable for these periods by approximately $30 to $40 million, and as a result of the foregoing, that Central European Distribution Corp's statements were allegedly materially false and misleading at all relevant times.
Central European Distribution Corp reported that its annual Revenue increased from $571.24million in 2008 to $877.59million in 201. However, its Net Loss increased over the same time periods from $18.60million to $1.29billion.
Shares of Central European Distribution Corp (NASDAQ:CEDC) rose from as low as $6.47 per share to $38.56 per share in April 2010.
Since then NASDAQ:CEDC shares lost substantially value.
Then on June 4, 2012, Central European Distribution Corporation (NASDAQ: CEDC) announced that it expects to restate its financial results for all financial reporting periods from and after January 1, 2010.
Central European Distribution Corporation said that it changed its senior management at its main operating subsidiary in Russia, the Russian Alcohol Group ("RAG"), during April 2012 and following this change senior Central European Distribution Corporation management requested that the new management team review RAG's business operations and internal controls, including an assessment of the resources and needs of the corporate finance and reporting departments, as identified in Item 9A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.
NASDAQ:CEDC share fell on June 8, 2012, to as low as $2.82 per share.