Robbins LLP: CTPartners Executive Search Inc. (CTP) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of CTPartners Executive Search Inc. (NYSEMKT: CTP) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between February 26, 2014 and January 28, 2015. CTPartners facilitates the recruitment and hiring of C-level executives.
CTPartners Misrepresents Its Business Practices
According to the complaint, shares of CTPartners fell multiple times beginning on December 8, 2014, with a drop of 24%, or $4.50, to close at $14.00 per share after the company abruptly withdrew a stock offering of 702,703 shares, announced less than 24 hours prior. Earlier that day, The New York Post published an article reporting that a complaint had been filed with the Equal Employment Opportunity Committee (EEOC) alleging gender discrimination. Specifically, CTPartners is accused of fostering an environment where women are stripped of profitable accounts, held to a higher standard than male colleagues, and subjected to lewd behaviors by top executives.
On January 22, 2015, the company experienced a decline of 29%, or $3.63 per share, to close at $8.87 after announcing its preliminary fourth quarter adjusted earnings per share of $0.06 to $0.08, missing the company’s guidance of $0.19 to $0.21 per share. The company blamed the guidance miss on $1.3 million spent on unanticipated expenses related to increased management, administrative, and business development costs. Shares of CTPartners dropped again on January 28, 2015, by $2.17, or 33%, to close at $4.35 after the company withdrew its fourth quarter and year-end guidance announced only a week prior. CTPartners disclosed that it expected to post a fourth quarter 2014 adjusted earnings per share loss of $0.07 to $0.09 per share. The company blamed the downward revision of adjusted earnings per share to a $1.7 million increase in compensation expenses for employee bonuses. In addition, CTPartners withdrew a planned stock offering announced two days prior.
CTPartners 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.