Telecom expense-management provider Tangoe is the defendant in a class-action lawsuit accusing the company and "certain officers" of making false statements in order to increase the price of its stock.
The suit, filed last week in a federal court in Connecticut, says Tangoe violated federal securities law. Specifically, the complaint says the defendants "made false and/or misleading statements and/or failed to disclose that: (i) the Company was overstating organic growth by underreporting the percentage of revenue derived from recent acquisitions; (ii) the Company was not growing customers organically as its deferred implementation fees failed to grow; and (iii) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times."
The complaint points to a report in the summer of 2012 by thestreetsweeper.org that described the company as having a "risky acquisition-driven growth strategy." Another report a week later by Copperfield Research determined that Tangoe "had materially misrepresented its organic growth rate."
Orange, Conn.-based Tangoe's stock peaked at nearly $23 per share in May 2012 before falling to less than $12 by the end of the year. It closed at $13.15 on Tuesday.
Anyone who bought shares in Tangoe between Dec. 20, 2011 and Sept. 5, 2012, is eligible to participate in the class action. The cutoff date for application is April 29.
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