The law firm of Berman DeValerio has filed a securities class action lawsuit against KIT digital, Inc. (NASDAQ: KITD)(“KIT digital” or the “Company”) and certain of its officers (collectively, with KIT digital, the “Defendants”). KIT digital is a global provider of on-demand Internet Protocol-based video asset management systems.
The lawsuit alleges violations of United States securities laws on behalf of purchasers of KIT digital common stock between May 19, 2009 and November 21, 2012 (the “Class Period”). The complaint was filed Dec. 18, 2012 in the United States District Court for the Southern District of New York, as Hughes v. KIT digital et al., 12-civ-9210 (S.D.N.Y.).
That same day, the Company announced that it had dismissed its independent auditor, Grant Thornton LLP, and that its stock would be delisted from the NASDAQ Stock Market effective Dec. 21, 2012. To receive a copy of the complaint, please call Berman DeValerio at (800) 516-9926 or click here.
Pursuant to the Private Securities Litigation Reform Act of 1995, investors wishing to serve as the lead plaintiff in the case must file a motion for appointment with the court no later than January 29, 2013.
The lawsuit alleges claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, 15 U.S.C. §§ 78j(b) and 78t(a), and Rule 10b-5 promulgated thereunder by the United States Securities Exchange Commission on behalf of Class Period investors.
According to the lawsuit, the Defendants made material false and misleading statements and failed to disclose material facts about KIT digital’s business. Specifically, the lawsuit alleges that the Defendants made false and misleading statements and/or failed to disclose (1) that there were irregularities with the Company’s accounting relating, in part, to revenue recognition for certain license agreements; (2) that the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (3) that the Company’s internal controls were deficient and incapable of producing adequate financial reporting, as was revealed later in the Class Period; and (4) as a result of the above, the Company’s financial statements were materially false and misleading at all relevant times.
On November 21, 2012, after the stock markets closed, the Company announced that it would restate its financial statements for the fiscal years 2009, 2010, and 2011 and for the first two quarters of 2012 because of accounting errors and irregularities relating to the recognition of revenue for software license agreements. Upon this announcement, the Company’s share price fell $1.33 per share on November 23, to close at $0.74. The decline in KIT digital’s stock price represented a loss of over 64%.
If you are a member of the class, you may, no later than January 29, 2013, request that the court appoint you as lead plaintiff for the class. You may contact Berman DeValerio to discuss your rights and interest in the case. Please note that you may also retain counsel of your choice or, alternatively, take no action at this time, in which case you will still remain a class member.
Berman DeValerio (www.bermandevalerio.com) is a national law firm representing investors for violations of securities and antitrust laws. The firm has 41 lawyers in Boston, San Francisco and Palm Beach Gardens, Florida.