DS Healthcare Group Inc (NASDAQ: DSKX) Investor Securities Class Action Lawsuit 03/29/2016

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Company Name(s): 
DS Healthcare Group
Case Name: 
DS Healthcare Group Shareholder Class Action Lawsuit 03/29/2016
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Proposed
Affected Securities
NASDAQ: DSKX
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
03/29/2016
Class Period Begin: 
05/15/2014
Class Period End: 
04/03/2016
Court of Filing: 
U.S. District Court for the Southern District of Florida
Deadline To File for Lead: 
05/31/2016
Date Settled: 
06/01/2017
Settlement Amount: 
$2,100,000
Deadline to Participate in Settlement: 
08/15/2017
Summary: 

June 1, 2017 - The court preliminarily approved the settlement.

May 26, 2017 - Parties filed a stipulation of settlement.

November 2, 2016 - The lead plaintiffs filed a second amended complaint on behalf of investors who purchased DS Healthcare Group Inc (NASDAQ: DSKX) common shares between May 15, 2014 and April 3, 2016. The lead plaintiffs allege that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between May 15, 2014 and April 3, 2016.

July 6, 2016 - Lead plaintiffs and lead counsel were appointed and all cases were consolidated.

May 31, 2016 - Lead plaintiff motions were filed.

March 29, 2016 - An investor in shares of DS Healthcare Group Inc (NASDAQ: DSKX) filed a lawsuit in the U.S. District Court for the Southern District of Florida over alleged violations of Federal Securities Laws by DS Healthcare Group Inc in connection with certain allegedly false and misleading statements made between August 13, 2015 and March 23, 2016.

According to the complaint the plaintiff alleges on behalf of purchasers of DS Healthcare Group Inc (NASDAQ: DSKX) common shares between August 13, 2015 and March 23, 2016, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between August 13, 2015 and March 23, 2016 the defendants made false and/or misleading statements and/or failed to disclose that the unaudited condensed consolidated financial statements for the two fiscal quarters ended June 30, 2015 and September 30, 2015 improperly recognized revenues related to certain DS Healthcare Group Inc customers, which did not meet revenue recognition criteria, that the unaudited condensed consolidated financial statements for the two fiscal quarters ended June 30, 2015 and September 30, 2015 contained certain equity transactions for the periods ended June 30, 2015 and September 30, 2015 that were not in accordance with United States Generally Accepted Accounting Principles and which were also not properly disclosed, that the defendant Khesin violated his fiduciary duty to DS Healthcare Group Inc and its subsidiaries, and that as a result, defendants’ statements DS Healthcare Group Inc’s business, operations and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.

DS Healthcare Group Inc reported that its annual Total Revenue declined from $13.65 million in 2013 to $13.41 million in 2014 while its Net Loss declined from $3.21 million in 2013 to $1.31 million in 2014.

On March 23, 2016, DS Healthcare Group Inc disclosed that the Company’s prior financial statements should no longer be relied upon, due to revenue recognition errors and improper recording of certain equity transactions. DS Healthcare Group Inc said it discussed these issues with its Audit Committee and independent accounting firm, and plans to restate the relevant Company financial statements as soon as possible. Additionally, DS Healthcare Group Inc disclosed that the Audit Committee and independent counsel had started an investigation into the Company President, Daniel Khesin’s, involvement in the allegedly fraudulent revenue recognition and equity transaction errors; and that Mr. Khesin’s employment as President of DS Healthcare Group Inc has been terminated for cause based on the current results of the investigation.

Shares of DS Healthcare Group Inc (NASDAQ: DSKX) declined to as low as $0.65 per share on March 24, 2016.