WageWorks provides tax-advantaged programs for consumer-directed health, commuter, and other employee spending account benefits in the United States.
The complaint alleges that WageWorks and certain of its senior executive officers made false and misleading statements and/or failed to disclose to investors that: (i) there were material weaknesses in WageWorks’ systems of internal controls and that its practices and controls were ineffective; (ii) WageWorks failed to adequately manage and assess risk relating to certain complex transactions, including certain government contracts; (iii) WageWorks improperly recognized revenue thereby inflating its earnings and related financial metrics; and (iv) as a result of the foregoing, WageWorks’ financial statements were materially false and misleading at all relevant times. As a result of the issuance of these false and misleading financial statements, throughout the Class Period, the common stock of WageWorks traded at artificially inflated prices.
On March 1, 2018, WageWorks disclosed that it was delaying the filing of its Form 10-K for the fiscal year ending December 31, 2017. Following this news, shares of the Company’s common stock declined $9.75 per share, or over 18.5%, to close at $42.70, on heavy trading volume.
The following day the Company reported that it “has concluded that it has a material weakness in its internal control over financial reporting related to managing change and assessing risk in the areas of non-routine and complex transactions.” Additionally, the Company disclosed that “[t]he Audit Committee of the Company’s Board of Directors is conducting an independent investigation of the Company’s internal control over financial reporting in fiscal 2016 and 2017. Among other matters, the investigation consists of a review of certain issues, including revenue recognition, related to the accounting for a government contract during fiscal 2016 and associated issues with whether there was an open flow of information and appropriate tone at the top for an effective control environment.”
If you are a member of the class, you may, no later than May 8, 2018, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.
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