Xerox Corp (NYSE: XRX) Investor Securities Class Action Lawsuit 10/21/2016

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Company Name(s): 
Xerox
Case Name: 
Xerox Shareholder Class Action Lawsuit 10/21/2016
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: XRX
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/21/2016
Class Period Begin: 
04/23/2012
Class Period End: 
10/27/2015
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
12/23/2016
Summary: 

April 20, 2018 - The lead plaintiff filed a notice of appeal.

March 20, 2018 - The court granted defendants' motions to dismiss.

June 30, 2017 - Defendants filed motions to dismiss.

May 1, 2017 - The lead plaintiff filed an amended complaint on behalf of investors who purchased Xerox Corp (NYSE: XRX) common shares between April 23, 2012 and October 27, 2015. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between April 23, 2012 and October 27, 2015.

February 28, 2017 - Lead plaintiff and lead counsel were appointed.

December 23, 2016 - Lead plaintiff motions were filed.

October 21, 2016 - An investor in shares of Xerox Corp (NYSE: XRX) filed a lawsuit in the U.S. District Court for the Southern District of New York over alleged violations of Federal Securities Laws by Xerox Corp in connection with certain allegedly false and misleading statements made between April 23, 2012 and October 23, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of Xerox Corp (NYSE: XRX) common shares between April 23, 2012 and October 23, 2015, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between April 23, 2012 and October 23, 2015 the defendants violated provisions of the Securities Exchange Act of 1934 by issuing allegedly false and misleading statements regarding the profitability and growth prospects of an important software product called Health Enterprise—designed to assist state agencies administer their respective Medicaid programs.

The plaintiff says that beginning in 2009, as Xerox Corp’s hardware products became less profitable, it embarked on a new corporate strategy to transition into more of a computer services-related company and that as part of Xerox Corp’s computer services transition strategy, Xerox Corp acquired Affiliated Computer Services, Inc. for $6.4 billion in February 2010.

Through the acquisition, Xerox Corp took over the Health Enterprise product, which provides software solutions for states to manage all aspects of their contemporary Medicaid programs and to do so in accordance with government rules and regulations.

The plaintiff claims that the defendants’ statements between April 23, 2012 and October 23, 2015 pertaining to the profitability and growth prospects of the Health Enterprise business were materially false and misleading because defendants failed to disclose that Xerox Corp’s existing Health Enterprise projects were experiencing major delays and cost overruns, that Xerox Corp would be unable to deliver Health Enterprise implementations at sustainable profits, and that as a result, Xerox Corp’s positive statements about its business, operations, and prospects lacked a reasonable basis.

In October 2013 Xerox Corp said the Securities and Exchange Commission (“SEC”) has launched an investigation into certain accounting practices at its Affiliated Computer Services Inc unit.

The plaintiff says that beginning in late 2014, this truth began to be revealed in a series of disclosures that exposed implementation delays, cost overruns, and customer disputes.

In 2014, two former Affiliated Computer Services Inc executives settled with the SEC over claims that they padded Affiliated Computer Services Inc’s revenue by arranging to redirect pre-existing transactions through the company.

On January 30, 2015, Xerox Corp reported its financial results for the full year 2014. Xerox Corp reported that its annual Total Revenue declined from over $20 billion in 2013 to over $19.54 billion in 2014 and that its Net Income declined from over $1.15 billion in 2013 to over $1.01 billion in 2014.

Then in October 2015, two key state agencies terminated Health Enterprise contracts with Xerox Corp.

The plaintiff says that by then, Xerox Corp had taken more than $500 million in related asset write-downs.

On January 29, 2016, Xerox Corp reported its financial results for the full year 2015. Xerox Corp reported that its annual Total Revenue declined from over $19.54 billion in 2014 to over $18.04 billion in 2015 and that its Net Income declined from over $1.01 billion in 2014 to over $474 million in 2015.

Shares of Xerox Corp (NYSE: XRX) declined from as high as $14.32 per share in late 2014 to as low as $8.77 per share in February 2016.