Flex Ltd. (FLEX) Accused of Misrepresenting Execution of Customer Contracts

According to the complaint against the company's officers and directors for alleged violations of the Securities Exchange Act of 1934 between January 26, 2017 and October 25, 2018, Flex Ltd. (FLEX) repeatedly assured investors that the company's internal controls over financial reporting were adequate and proper, and that its most crucial contract – to automate Nike's manufacturing process – was hitting key milestones while timely proceeding on a steady trajectory to profitability. On April 26, 2018, Flex announced that a whistleblower had forced it to disclose weaknesses in internal controls relating to its customer contracts and that it was having operation issues with the Nike contract.  Notwithstanding, defendants continued to reassure the public that its Nike contract would ultimately be profitable.  Then, on October 25, 2018, Flex announced it was immediately winding down its Nike operations because it was not commercially viable.  The complaint contends that as a result of Flex's misstatements, the company's stock lost half its value, falling to just $7.09 on October 26, 2018.