Robbins Umeda LLP Announces an Investigation of Travelzoo Inc.
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Travelzoo Inc. (NASDAQ: TZOO). Travelzoo is an internet media company that publishes travel and entertainment offers from various companies in North America and Europe. The company was founded in 1998, and is headquartered in New York, New York.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Travelzoo harmed the company and investors by issuing materially false and misleading statements that have damaged the company’s value and reputation. In particular, the firm is investigating allegations that Chief Executive Officer Christopher J. Loughlin and other fiduciaries at the company issued improper statements to investors designed to artificially inflate the value of the company. Beginning on April 21, 2011, officials at Travelzoo issued statements to investors that failed to reflect adverse, material facts about the company’s actual growth rate, the impact of other low-cost travel competitors, and considerably higher costs and expenses. Also at this time, Travelzoo’s founder and former Chairman of Board, Ralph Bartel, along with other executives, allegedly engaged in a coordinated insider trading scheme to reap over $185 million in illicit proceeds from stock options sold while the company traded at inflated prices. On July 21, 2011, Travelzoo announced quarterly results that showed the company was performing well below expectations. On this news, shares of Travelzoo collapsed 32% to close at just $55.00 per share, and have continued to decline, closing at just $44.21 per share on August 15, 2011.
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