Pareteum Corporation (TEUM) Accused of Misleading Shareholders
According to the class action complaint for alleged violations of the Securities Exchange Act of 1934 between March 12, 2019 and October 21, 2019, Pareteum Corporation (TEUM) issued a Form 10-K with the SEC reporting total revenue of $32.4 million for fiscal year 2018. In May 2019 and August 2019, the Company filed quarterly Form 10-Qs with the SEC reporting total revenues of $23 million and $34.1 million respectively. In all of its filings, Pareteum attested to its accuracy of financial reporting as well as the disclosures of any material changes to its control over financial reporting or fraud. Contrary to its assurances, on October 21, 2019, Pareteum issued a press release revealing that the Company would need to restate its previously issued financial statements for full year 2018 as well as the first and second quarter 2019, citing its improper recognition of certain revenues during that period as the reason. As a result, the Company estimated a reduction in revenue of approximately $9 million for full year 2018 and approximately $24 million for the first half of 2019. On this news, Pareteum’s share price fell 59% to close at around $0.30 per share.