Class action suit claims Acxiom, former execs withheld adverse information
Law firm Izard Nobel filed a class action lawsuit on behalf of Acxiom Corp. common stockholders this week, claiming Acxiom officers and directors violated federal securities laws by failing to disclose facts about the company's struggling financial performance.
The suit, filed in US District Court: Western District of Arkansas, alleges that Acxiom withheld information about a significant decline in its international operations; that the company failed to properly and timely account for impaired assets related to its international operations; and that, as a result, statements made by the defendants about the company's financial performance and expected earnings were misleading.
Law firm Bronstein, Gewirtz & Grossman filed a similar class action suit on April 28, according to a statement from the firm. The statement uses the exact same terminology as Izard Nobel's grievance to classify Acxiom's alleged offenses.“With regard to recent media coverage about a class action suit filed against Acxiom on behalf of an institutional investor, it is the belief of Acxiom that it has acted in accordance with the law and has not done anything improper,” the Little Rock, Ark.-based company said in a statement. “We intend to vigorously defend the merits of the case.”
Former Acxiom CEO John Meyer and former EVP and CFO Christopher Wolf, who both resigned on March 30, are named as defendants in suit, in addition to the company itself. The complaint states that Meyer and Wolf are liable for making false statements, failing to disclose adverse facts, deceiving the public and inflating the price of Acxiom stock.
The suit maintains that Acxiom stock traded at “inflated prices” while the company withheld knowledge of a decline in operations. Once the “revelations reached the market,” around the time of Meyer's departure, stocks fell 27.6%, according to the suit.
The allegations date back to October 27, 2010, when Acxiom announced its second quarter 2011 earnings. On an earnings call, Meyer “made numerous positive statements about the company's business, operations and prospects,” according to the suit. Similar statements were allegedly made during a Q3 2011 earnings call, as well.
The plaintiffs are requesting damages and interest, legal fees and other relief as the court may deem proper.
Izard Nobel did not respond to numerous interview requests.