Digital Olympus Comments on Groupon's Inability to End Lawsuit Alleging Fraud Tied to IPO

Top business news blog has commented on a recent news regarding Groupon’s inability to convince a federal judge to terminate a lawsuit indicting the firm of deceiving investors prior to its decision to go public in November 2011.


Long Island, NY -- (SBWIRE) -- 11/20/2013 -- Sequel to a recent news story by Jonathan Stempel published on September 20 on regarding the inability of Groupon to persuade a federal judge to throw out a lawsuit alleging the daily discount provider of misinforming investors concerning its financial prospects and internal controls prior to its IPO in November 2011.

The report points that U.S. District Judge Charles Norgle in Chicago declared the lead plaintiff reasonably alleged that Groupon used inappropriate "refund accounting" to enhance revenue and cut operating losses in initial public offering materials and ensuing regulatory filings and was aware or should have known that its statements were made-up. In his verdict dated September 18, Norgle also turned down requests by Credit Suisse, Goldman Sachs and Morgan Stanley which organized the IPO to terminate claims against them.

“The verdict of the judge was based on the effort of the lead plaintiff to plausibly present its case against Groupon,” says principal researcher Josh Cole. “Firms involved in business related lawsuit should always seek litigation support services from experts to enable them defend their position better.”

According to Stempel’s report “The lawsuit seeks class-action status and is led by Michael Carter Cohn, an individual investor. Norgle said he will decide later whether Cohn has standing to pursue one claim on behalf of a class given that he did not buy his shares directly from the IPO. Groupon went public at $20 per share on November 4, 2011, valuing the company at the time at well over $10 billion.”

In a statement following the report, spokesperson stated that properly conducted due diligence investigations by specialized firms can help companies and individuals make the right decision in choosing where to invest. “Nothing should be left to chance in business transactions especially giving the right information to parties involved.”

As a leading news and technologies blog, is committed to supplying beneficial recommendations on how to steer clear of fraud and corruption violations, whilst also encouraging the adoption of due diligence procedures, background investigation and intelligence policies that can help companies boost their efficiency with respect to books and records internal controls.

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