Unisys Corporation (UIS) had Material Weaknesses in its Internal Controls Over Financial Reporting
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Unisys Corporation (NYSE: UIS) securities between August 3, 2022 and November 7, 2022, for violations of the Securities Exchange Act of 1934. Unisys, with its subsidiaries, operates as an information technology services company worldwide.
According to the complaint, on August 3, 2022, Unisys provided its 2022 financial guidance, stating that “[r]evenue growth is now expected to be in the range of (1.0)% to 1.0% YoY or in the range of 2.5 to 4.5% in constant currency. The company now anticipates that non-GAAP operating profit margin will be between 7.5 to 9.0% and adjusted EBITDA margin in the range of 16.0 to 17.5%.”
However, defendants failed to disclose that the Company’s 2022 financial guidance was significantly overstated and that the Company would be required to negatively revise its 2022 financial guidance. On November 7, 2022, Unisys disclosed that it was lowering its previously stated 2022 financial guidance by a significant margin and that it would be “unable to file, without unreasonable effort and expense and within the prescribed time period, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2022 (the ‘Form 10-Q’).” Specifically, the Company stated that its audit and finance committee “is conducting an internal investigation regarding certain disclosure controls and procedures matters” and that “[f]ollowing the evaluation of the results of the investigation, the Company expects that it may determine that there are one or more material weaknesses in its internal control over financial reporting, which may result in a conclusion that the Company’s disclosure controls and procedures and internal control over financial reporting are not effective.”
On this news, Unisys’s stock price fell $4.33 per share, or 48%, to close at $7.89 per share on November 8, 2022.
What Now: Shareholders who purchased shares of Unisys Corporation securities between March 10, 2021 and October 4, 2022, must file their papers to be appointed lead plaintiff for the class by January 9, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.