On August 22, 2016, Pomerantz LLP was appointed Co-Lead Counsel in a class action securities lawsuit against SuperCom Ltd. (“SuperCom” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-00919, is on behalf of a class consisting of all persons or entities who purchased SuperCom securities between March 27, 2014 and November 27, 2015 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
SuperCom, headquartered in Herzliya, Israel, provides traditional and digital identity solutions to governments and private and public organizations worldwide. The Company was founded in 1988 as SuperCom, changed its name to Vuance Ltd. in 2007 and changed its name back to SuperCom in March 2013.
The Complaint alleges that throughout the Class Period, Defendants issued false and misleading statements to investors and/or failed to disclose that: (1) SuperCom was having difficulty closing certain governmental sales and the revenue associated with those sales would be substantially delayed, (2) SuperCom's "pipeline" was neither strong nor "broadening,"; and (3) as a result, SuperCom was not on track to achieve the financial results Defendants had led the market to expect during the Class Period. As a result of Defendants' false and misleading statements and/or omissions, SuperCom's common stock traded at artificially inflated prices during the Class Period, reaching a high of $13.84 per share.
On November 30, 2015, SuperCom announced its preliminary financial results for the third quarter of 2015, acknowledging that it had significantly missed its own revenue target and disclosing that the Company expected third quarter 2015 revenues to come in at $5.5-$6.1 million, less than half of the $13.38 million the Company had led the investment community to expect, and that it would be forced to lower its fiscal year 2015 guidance. The Company stated that its "financial performance in the third quarter and full-year were impacted by [its] inability to recognize more than $10 million of revenues that were expected this year, mainly due to delays associated with foreign government customers."
On this news, the price of SuperCom common stock fell more than $3 per share, or 40 percent, from its close of $7.70 per share on November 27, 2015 to a close of $4.60 per share on November 30, 2015.