Robbins LLP: Celadon Group, Inc. (CGI) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against Celadon Group, Inc. (NYSE: CGI) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of Celadon securities between December 30, 2016 and April 18, 2017, for alleged violations of the Securities Exchange Act of 1934 by Celadon’s officers and directors. Celadon, through its subsidiaries, provides transportation services between the United States, Canada, and Mexico.
Celadon Accused of Hiding its Insolvent Condition from Investors
According to the complaint, Celadon officials failed to disclose to investors that its equity contribution to its joint venture with Element Financial Corp. was $68.2 million, rather than the $100 million contribution the company reported in its public filings, and that Celadon was being actively investigated by the U.S. Securities and Exchange Commission (“SEC”). On April 5, 2017, Seeking Alpha published a report by Prescience Point Research Group alleging that Celadon used manipulative accounting practices to hide its insolvent condition from investors and creditors and that Celadon had overstated its investment in its joint venture by $31.8 million. Then, on April 19, 2017, Prescience Point published another report stating that it was denied information about Celadon sought under the Freedom of Information Act due to an ongoing SEC investigation. Since news of Celadon’s troubles hit the market, its share price fell over 38% to an intra-day price of $3.85 per share on April 19, 2017.
Celadon Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, or you can complete the form below and we will contact you directly.