Quik! Sue them!
Quiksilver been in the news quite a bit lately. According to Law360, they’ve been hit with a lawsuit accusing them of hiding revenue reporting problems from their investors. Since last year, when they had their very public break up with Kelly Slater, things just haven’t been going right. You know that period after a break up when you’re a drunken mess, sitting in your underpants pretending you’re ok while all your friends worry about you? “Ha ha!” you say to them. “I’m totally fine! But feel free to kill me any time!” That’s Quik right now.
Reports that Quik is on the receiving end of a securities class action in California federal court surfaced a few days ago, just after CEO Andy Mooney (the guy who swung the axe in last year’s sweeping employee reductions) was let go. The claim states that Quiksilver was hiding revenue reporting problems from investors, which turned into steep stock losses when the truth came out. The losses were compounded when Mooney was canned.
According to Law360, the lawsuit, filed by a man named Leiland Stevens, Quiksilver’s stock plummeted when the company divulged that they were looking into a “revenue cut-off issue.” Then, on March 27, Mooney was removed, and CFO Richard Shields resigned, and another cinderblock was added to the stock’s cement shoes.
In the months leading up to this news, Quiksilver told the U.S. Securities and Exchange Commision (SEC)–a group that regulates securities markets to protect investors–that their reports were accurate. But on March 4th, Quiksilver said they would delay releasing financial results for the first quarter of 2015–after management had realized there was a revenue cut-off problem.
“The audit committee promptly commenced an investigation last week and has not yet reached any conclusions,” said Quiksilver in a statement. “Based on currently available information, the company believes that the completion of the audit committee’s investigation will have no material impact on its previously issued financial statements, its 2015 first quarter financial results, or its current guidance.”
After the news, stock dropped five percent, according to Leland Stevens. Then, on March 26th, the company amended the reports with SEC. According to the complaint, they said that “internal control over financial reporting was not effective as of October 31, 2014–contrary to what was previously reported.”
According to the suit, “As a direct and proximate result of defendants’ wrongful conduct, plaintiff and the other members of the class suffered damages in connection with their respective purchases, acquisitions and sales of the company’s securities during the class period, upon the disclosure that the company had been disseminating misrepresented financial statements to the investing public.”
Leland Stevens is representing investors who owned Quik stock between June 6 of 2014 and March 26 of 2015.
