NEW YORK, Aug. 12, 2017 (GLOBE NEWSWIRE) -- Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in GlobalSCAPE, Inc. (“GlobalSCAPE” or the “Company”) (NYSE MKT:GSB) of the October 10, 2017 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
If you invested in GlobalSCAPE stock or options between January 26, 2017 and August 7, 2017 and would like to discuss your legal rights, click here:www.faruqilaw.com/GSB. There is no cost or obligation to you.
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The lawsuit has been filed in the U.S. District Court for the Western District of Texas on behalf of all those who purchased GlobalSCAPE common stock between January 26, 2017 and August 7, 2017 (the “Class Period”). The case, Giovagnoli v. Globalscape, Inc. et al, No. 5:17-cv-00753 was filed on August 9, 2017.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that (i) GlobalSCAPE overstated the reported amounts of accounts receivable as of December 31, 2016, and license revenue for the three months and year ended December 31, 2016, by approximately $403,000 and $396,000, respectively, resulting in the overstatement of the Company’s revenues for those periods by the same amounts; (ii) GlobalSCAPE’s total current assets and total assets were overstated by $292,000; (iii) GlobalSCAPE’s total stockholders’ equity and total liabilities were overstated by $217,000 and $292,000, respectively; (iv) GlobalSCAPE lacked adequate internal controls over financial reporting; and (v) as a result, GlobalSCAPE’s publicly disseminated financial statements were materially false and misleading.
Specifically, after market on August 7, 2017, the Company disclosed that its audit committee “has been conducting an investigation into certain transactions in the fourth quarter of 2016 involving improper arrangements with customers that circumvented the Company's internal controls and their potential effect on previously reported revenue.” Further, the Company disclosed that it “intends to effect a restatement of its previously issued financial statements through filing an amended Annual Report on Form 10-K for the year ended December 31, 2016 and an amended Quarterly Report on Form 10-Q for the quarter ended March 31, 2017.”
On this news, GlobalSCAPE’s share price fell from $4.70 per share on August 7, 2017 to a closing price of $3.87 on August 8, 2017 —a $0.83 or a 17.66% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding GlobalSCAPE’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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