Ignite Restaurant Group Inc (NASDAQ:IRG) Investor Files Class Action Lawsuit Over Alleged Violations of Securities Laws
July 20, 2012 (Shareholders Foundation) -- An investor in shares of Ignite Restaurant Group Inc (NASDAQ:IRG) filed a lawsuit in the U.S. District Court for the Southern District of Texas over alleged violations of Federal Securities Laws in connection with certain financial statements made by Ignite Restaurant Group Inc.
According to the complaint the plaintiff alleges on behalf of investors, who purchased their NASDAQ:IRG shares in the IPO or between May 10, 2012 and July 18, 2012, that the defendants violated the Securities Act of 1933. Specifically, the plaintiff alleges that the IPO documents contained allegedly false financial statements because the Company improperly accounted for leases.
Ignite Restaurant Group Inc (NASDAQ:IRG) reported that its Total Revenue increased from $273.36million for the 12months period ending on Dec. 29, 2012 to $40.524million for the 52weeks period ending on Jan 2, 2012 and that its Net Income over the same time periods rose from a Net Loss of $3.21million to a Net Income of $11.25million.
Then on July 18, 2012, after the market closed, Ignite Restaurant Group, Inc. (NASDAQ: IRG) announced that its expects to restate its previously issued financial statements for years 2009 through 2011 and for the first quarter of 2012. The company said that following an internal assessment of its lease accounting policies, it has determined it necessary to correct non-cash related errors related to its accounting treatment of certain leases.
Shares of Ignite Restaurant Group Inc (NASDAQ:IRG) dropped from $19.06 on July 18, 2012, to $14.855 on July 19, 2012.
On July 20, 2012, NASDAQ:IRG shares closed at $14.20 per share.