A class action suit has been launched against Groupon. It claims that the Chicago-based group deal provider issued misleading revenue projections prior to its IPO.
The suit, filed April 3 in U.S. District Court for the Northern District of Illinois, charged “false and misleading statements” caused the company’s stock to initially trade at inflated levels.
On March 30, Groupon said its previous accounting underestimated the amount of money it needed to set aside for customer refunds, causing the company to restate its fourth quarter revenues. In reaction to the news, Groupon shares fell 17 percent, the suit charges.
The complaint, filed by plaintiff Fan Zhang, targets both Groupon and the company CEO’s Andrew D. Mason, as well as its CFO, other executives, and the company’s bankers.
The suit, which covers people who bought stock between Nov. 4, 2011, and March 30, 2012, is not the only headache for the company: According to The Wall Street Journal, the SEC is also investigating the company’s recent restating of results.
A Groupon spokesman could not be reached for comment. However, when it reissued its fourth quarter results, the company said it is working with a global accounting firm to better its internal financial controls.