A recent lawsuit has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased shares of MDC Partners, Inc. This news comes amidst an investigation by the SEC into MDC Partners PR. As we covered recently, the situation at MDC hasn’t been too stable.
There are a number of PR firms – including Allison & Partners, Sloane & Company, HL Group & Kwittken owned by MDC – and we at Everything PR News want to see if these PR firms may also start suing the parent company. A number of these firms were acquired during the period in question – and is possible some of the owners may have been paid more money had shenanigans not taken place.
The lawsuit alleges that between September 24, 2013 and April 27, 2015, MDC “made or caused to be made a series of materially false or misleading statements about MDC Partners’ business, executive compensation, related-party transactions, goodwill, prospects and operations.”
The allegations made will examine whether or not MDC Partners provided false information to investors.. The final results of MDC’s proposed error may have led to a flawed portrayal about the health and stability of MDC common stock. Artificially enhanced results caused an inflated stock price leading new investors to seriously overpay for their shares
A great case-in-point to exemplify how damaging the pending action is for MDC appeared during April 27, 2015’s closing. The trading day closed with a press release from MDC spurring volatile behavior in their common stock. The press release noted that a formal investigation into the company from the SEC was underway. This news led MDC’s stock to fall 27.8 percent that day. The plummet moved the stock price from $28.65 down to $20.20 on April 28, 2015. Plaintiffs are now seeking compensation for the period between September 2013 and April 2015.
Robbins Geller represents the plaintiffs. With over 150 lawyers in more than nine offices, Robbins Geller stands as the go-to legal representatives of U.S. and international investors. The largest securities action recoveries in recorded history were achieved by this firm. With current situation surround MDC, Everything PR hopes that this is not going to affect clients of the PR Agencies in question.