Securities attorneys have filed a class action complaint against UniTek Global Services, Inc. in connection with its recent 50% stock drop. According to the complaint,
On April 12, 2013, UniTek issued a press release (the “April 12 Press Release”) announcing that the Company was being forced to restate its financial results for the interim periods ended March 31, 2012, June 30, 2012 and September 29, 2012, the fiscal year ended December 31, 2011 and the interim period ended October 1, 2011. Further, “[a]s a result of an ongoing internal investigation being conducted by the Audit Committee of the Company’s Board of Directors … it was determined that several employees of the Company’s Pinnacle Wireless subsidiary engaged in fraudulent activities that resulted in improper revenue recognition.” (Emphasis added). The Company also stated that the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 would be late.
The April 12 Press Release also revealed that that Ronald J. Lejman (“Lejman”), Chief Financial Officer and Treasurer was terminated, effective immediately and that “[i]n connection with the internal review and based on the recommendation of the Audit Committee, the Company also announced the termination of Kevin McClelland (“McClelland”), Controller and Chief Accounting Officer, as well as the terminations of Michael Hayford (“Hayford”), President of the Pinnacle Wireless division, several other employees of Pinnacle Wireless and an employee of the UniTek finance department. None of the terminated individuals will receive severance.” (Emphasis added).
On this news, UniTek’s stock price fell from its prior trading day close of $3.01 to close at $1.52 (a decline of nearly 50%) on April 15, 2013, on heavy trading volume.