Robbins LLP: Conn’s, Inc. (CONN) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of CONN’s, Inc. (NASDAQGS: CONN) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of Texas Houston Division. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between September 2, 2014 and December 9, 2014. Conn’s is a retailer of durable consumer products, including appliances, furniture, and mattresses in the United States.
Conn’s Is Accused of Misleading Investors
On December 9, 2014, shares of Conn’s dropped over 40%, or $14.26 per share, to close at $20.83 after the company reported a net loss in the third quarter of fiscal 2015. The company revealed that this loss was due, in part, to increased provisions for bad debt and customer delinquency rates. In this same press release, Conn’s acknowledged that the forecasting of its credit operations have not been acceptably accurate and announced additional oversight in that area and that the board of directors established a Credit Risk Compliance Committee. Additionally, this press release announced the resignation of Chief Financial Officer Brian Taylor, effective immediately.
The complaint further alleges that the defendants made false and/or misleading statements and/or failed to disclose to investors that: (i) the company was increasing its business and financial results by using underwriting and collections practices that weakened the company’s portfolio and left it vulnerable to substantial increases in bad debt; (ii) the company was experiencing rising delinquencies at a substantially different rate than it was representing; (iii) the company’s credit segment practices substantially threatened the company’s financial performance; and (iv) as a result of the foregoing, the company’s statements were materially false and misleading and/ or lacked reasonable basis at all relevant times.
Conn’s Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.