The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Live Ventures Incorporated securities between December 28, 2016 and August 3, 2021, inclusive (the “Class Period”). Live Ventures investors have until October 12, 2021 to file a lead plaintiff motion.
On August 3, 2021, the U.S. Securities and Exchange Commission (“SEC”) filed a complaint against Live Ventures, its Chief Executive Officer, and its Chief Financial Officer alleging “multiple financial, disclosure, and reporting violations related to inflated income and earnings per share, stock promotion and secret trading, and undisclosed executive compensation.” Specifically, the SEC alleged that Live Ventures had recorded income from a backdated contract, which increased pre-tax income for fiscal 2016 by 20%, and understated its outstanding share count, which overstated earnings per share by 40%.
On this news, the Company’s share price fell $29.08, or 46%, to close at $33.50 per share on August 4, 2021, on unusually heavy trading volume. The stock price continued to decline $7.74, or 23%, over the next four consecutive trading sessions to close at $25.76 per share on August 10, 2021.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Live’s earnings per share for FY 2016 was actually only $6.33 per share; (2) that the Company used an artificially low share count to boost the earnings per share by 40%; (3) that Live had overstated pre-tax income for fiscal 2016 by 20% by including $915,500 of “other income” related to certain amendments that were not negotiated until after the close of the fiscal year; (4) that Live’s acquisition of ApplianceSmart did not close during first quarter 2017; (5) that using December 30, 2017 as the “acquisition date” and recognizing income therefrom did not conform to generally accepted accounting principles; (6) that, by falsely stating that the acquisition closed during the quarter, Live recognized bargain purchase gain, which enabled the Company to report positive net income in what would otherwise have been an unprofitable quarter; (7) that between fiscal 2016 and fiscal 2018, Live’s CEO received approximately 94% more in compensation than was disclosed to investors; and (8) as a result, Defendants’ statements about its business, operations, and prospects were materially false and misleading and/or lacked reasonable basis at all relevant times.
If you purchased Live Ventures securities during the Class Period, you may move the Court no later than October 12, 2021 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Live Ventures securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to email@example.com, or visit our website at www.frankcruzlaw.com.