Concordia International Corp (NASDAQ:CXRX) could be made to pay for alleged violation of securities law. Shareholder sights attorneys at Robbins Arroyo LLP have filed a class action complaint against the Concordia, citing that the company at various times in the past made statements about its financial and operational strengths that weren’t true.
Robbins Arroyo’s complaint against Concordia is brought on behalf of investors who owned or acquired shares of the company between Nov. 12, 2015 and Aug. 12, 2016.
During the class period, Robbins Arroyo said that Concordia bombarded investors with a series of press releases touting its solid financial results supported by a strong and diverse business model. It was during those times that they attorneys said Concordia its legacy unit was strengthening from quarter to quarter.
Concordia International Corp (NASDAQ:CXRX)’s portfolio includes branded and generic products sold in the U.S. and internationally.
What Concordia told investors
Among the statements that Concordia made include one where it said that its North America business generated $85.9 million in revenue for 1Q2016, suggesting a sharp increase of 177% over a corresponding quarter in 2015.
Robbins Arroyo adds that Concordia International Corp (NASDAQ:CXRX) didn’t see it wrong to affirm to its shareholders that revenue in 2016 would be in the range of $1.020 to $1.060 billion. However, the shareholder law firm says in its complaint that Concordia failed to disclose all the truth regarding its business position to shareholders.
For instance, Concordia didn’t tell investors that it was facing growing competition that it was no longer possible for it to grow at the rate it promised. Furthermore, the company didn’t make shareholders aware that competition was causing serious impact on its financial results that it couldn’t continue paying dividends.
The bad news for shareholders
It was only later that Concordia International Corp (NASDAQ:CXRX) admitted that the revenue bar it had set for 2016 was too high to hit. As such, the company cut its revenue target and on top of that suspended dividend payments. The company was paying a dividend of $0.075 per share quarterly.
When the news of these revenue and dividend adjustments entered the market, shares of Concordia plunged, thus causing losses to the class investors. Therefore, Robbins Arroyo is pursuing Concordia to compensate the investors for their losses.