Cnova NV (NASDAQ: CNV) Investor Securities Class Action Lawsuit 01/20/2016

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Company Name(s): 
Cnova
Case Name: 
Cnova Shareholder Class Action Lawsuit 01/20/2016
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: CNV
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/20/2016
Class Period Begin: 
11/19/2014
Class Period End: 
02/23/2016
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
03/21/2016
Date Settled: 
10/11/2017
Settlement Amount: 
$28,500,000
Deadline to Participate in Settlement: 
03/12/2018
Settlement Notice: 
Settlement Proof: 
Summary: 

October 11, 2017 - The court preliminarily approved the settlement.

September 22, 2017 - Parties filed a stipulation of settlement.

August 16, 2016 - The lead plaintiffs filed an amended consolidated complaint.

June 13, 2016 - The lead plaintiffs filed an amended complaint.

April 15, 2016 - Lead plaintiffs and lead counsel were appointed and all cases were consolidated.

January 20, 2016 - An investor in shares of Cnova NV (NASDAQ: CNV) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Cnova NV.

According to the complaint the plaintiff alleges on behalf of purchasers of Cnova NV (NASDAQ: CNV) securities issued in connection with the Company’s initial public offering (“IPO”) on or about November 19, 2014 (the “IPO”) and/or between November 19, 2014 and December 18, 2015, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that, within Cnova NV’s IPO registration statement, and/or between November 19, 2014 and December 18, 2015, defendants failed to disclose that Cnova NV overstated net sales, that Cnova NV failed to properly write-off the value of certain returned items, that there was a material discrepancy in accounts receivable related to the damaged/returned items, that, as such, the Company’s EBIT was overstated, that Cnova NV lacked adequate internal controls, and that, as a result of the foregoing, Cnova NV’s financial statements and Defendants’ statements about Cnova NV’s business, operations, and prospects, were materially false and misleading at all relevant times.

Cnova NV reported that its annual Total Revenue rose from over 2.89 billion EUR in 2013 to over 3.47 billion EUR in 2014 while its respective Net Loss increased from 22.49 million EUR to 51.79 million EUR.

On January 28, 2015 Cnova NV announced its financial results for the quarter and fiscal year ended December 31, 2014. Cnova NV announced that Net profit for fourth quarter in 2014 was € 0.8 million, compared to € 13.4 million for in the fourth quarter in 2013.

On December 18, 2015, post-market, Cnova NV announced that its Board of Directors has engaged legal advisors and external forensic accountants to perform a review of issues in connection with employee misconduct related to inventory management.

Shares of Cnova NV (NASDAQ: CNV) declined from $8.49 in January 2015 to as low as $2.15 per share on December 22, 2015.

On January 12, 2016, the company issued an update on its review of inventory management. The Company disclosed that: (1) it had uncovered an overstatement of Cnova NV net sales, (2) there was a “material discrepancy” in accounts receivable, and (3) that a 10% write-off of total inventory was necessary, among other issues.