Ebix Inc (NASDAQ: EBIX) Investor Securities Class Action Lawsuit 07/14/2011

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Company Name(s): 
Ebix
Case Name: 
Ebix Shareholder Class Action Lawsuit 07/14/2011
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: EBIX
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
07/14/2011
Class Period Begin: 
05/06/2009
Class Period End: 
06/30/2011
Court of Filing: 
U. S. District Court for the Southern District of New York
Deadline To File for Lead: 
09/12/2011
Date Settled: 
02/04/2014
Settlement Amount: 
$6,500,000
Deadline to Participate in Settlement: 
06/04/2014
Settlement Notice: 
Settlement Proof: 
Summary: 

January 4, 2016 - The court ordered the authorization of the distribution of the net settlement fund.

June 13, 2014 - The court approved the motion for attorneys’ fees and expenses.

June 11, 2014 - The court approved the settlement.

February 4, 2014 - The court preliminarily approved the settlement.

January 27, 2014 - Parties filed a stipulation of settlement.

September 28, 2012 - The court denied the defendants' motion to dismiss.

January 12, 2012 - The defendants filed a motion to dismiss.

November 28, 2011 - The lead plaintiff filed an amended consolidated complaint.

October 19, 2011 - All cases were consolidated.

October 14, 2011 - The lead plaintiff and lead counsel were appointed.

September 17, 2011 - The court ordered the case transferred to the U.S. District Court for the Northern District of Georgia.

September 12, 2011 - Lead plaintiff motions were filed.

July 21, 2011 - Another investor filed a complaint in the U.S. Court for the Northern District of Georgia on behalf of investors who purchased Ebix Inc (Exchange: Ticker) common shares between May 6, 2009 through June 30, 2011.

July 14, 2011 - An investor in shares of Ebix Inc (NASDAQ: EBIX) filed a lawsuit in the U.S. District Court for the Southern District of New York against Ebix Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between May 6, 2009 through June 30, 2011.

According to the complaint the plaintiff alleges that Ebix Inc violated the Securities Exchange Act of 1934 by issuing between May 6, 2009 through June 30, 2011 false and misleading statements, as well as failing to disclose material adverse facts about Ebix Inc’s business, operations, and prospects.

The lawsuit follows a steep 24% stock price drop in June following a report on Seeking Alpha with the title: “Ebix: Not a Chinese Fraud, But a House of Cards Nonetheless” on March 24, 2011 accusing Ebix Inc of engaging in a number of accounting manipulations.

Atlanta based supplier of software and e-commerce solutions Ebix’s 12 months Total Revenue increased from $42.84 million in 2007 to $132.19 million in 2010. Its Net Income rose from $12.67 million in 07 to $59.02 million in 2010. Shares of Ebix Inc (NASDAQ: EBIX) rose from under $15 in 2010 to as high as $29.72 on March 23, 2011. Then on March 24, 2011 Ebix Inc (NASDAQ: EBIX) shares fell from as high as $30.21 to $21.47 and closed Thursday’s trading at $22.52 per share.

Among other things, report on Seeking Alpha stated, that they “believe that EBIX is nothing more than a roll-up that has materially misrepresented its business (relative to the CEO's buzz words) as well as its organic growth. Its business model is predicated on two principals: tax arbitrage and dramatic cost cuts (headcount reductions and offshoring), neither of which is sustainable. Further, the company's tax arbitrage may be more than "just" unsustainable, it may actually be illegal. Ebix Inc's problems run deeper than unusual accounting. The Ebix Inc story also comes with multiple auditor resignations, governance abuses, misrepresented organic growth, questionable cash flow and a contentious CEO. “