Pomerantz LLP announces that a class action lawsuit has been filed against Global Eagle Entertainment Inc. (“Global Eagle” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Central District of California, and docketed under 17-cv-01479, is on behalf of a class consisting of investors who purchased or otherwise acquired Global Eagle securities, seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
Global Eagle provides content, connectivity, and digital media solutions for travel industry worldwide. The Company operates through two segments, Connectivity and Content.
On July 27, 2016, Global Eagle announced that it had completed its previously announced acquisition of Emergency Markets Communications (“EMC”), a communications services provider to maritime and hard-to-reach land markets.
The complaint 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 made false and/or misleading statements and/or failed to disclose that: (i) Global Eagle was unable to timely and properly account for the EMC acquisition; (ii) consequently, the Company lacked effective internal controls over financial reporting; and (iii) as a result, Global Eagle’s financial statements were materially false and misleading at all relevant times.
On February 21, 2017, pre-market, Global Eagle announced that the Company’s Chief Executive Officer David M. Davis and Chief Financial Officer (“CFO”) Thomas E. Severson Jr. had resigned from their positions with the Company. Concurrently, Global Eagle announced that it expected to file its Annual Report for fiscal year 2016 after the March 16, 2017 U.S. Securities and Exchange Commission deadline, citing the Company’s “increased size and complexity” after its acquisition of EMC, as well as “its need to transition the finance department after the prior CFO’s departure and its need to complete additional financial-closing procedures associated with the Company’s material weaknesses in internal control over its financial reporting.”
On this news, Global Eagle’s share price fell $1.74, or 27.97%, to close at $4.48 on February 21, 2017.