Ubiquiti Networks Accused of Grossly Exaggerating Size of Its User Base
According to a recently-filed class action complaint, Ubiquiti Networks (UBNT) drives brand awareness through the company’s user community, known as the “Ubiquiti Community.” Ubiquiti officials allegedly exaggerated the size of the Ubiquiti Community by approximately 3,290,000 users in the company’s financial statements and press releases. On September 18, 2017, Citron Research published a report detailing a series of “alarming red flags” indicating that Ubiquiti engaged in corporate fraud and misrepresented the size of the Ubiquiti Community and levels of accounts receivable. Citron’s exposure comes just after the sale of one million shares of Ubiquiti stock by Ubiquiti’s Chairman and Chief Executive Officer, Robert J. Pera. On February 20, 2018, Ubiquiti announced that the Securities and Exchange Commission issued subpoenas to the company requesting information about metrics relating to the Ubiquiti Community, accounting practices, and financial information, among other things. On this news, Ubiquiti’s stock fell more than 25%, closing at $55.28 per share on February 20, 2018.
Ubiquiti Networks Shareholders Have Legal Options
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