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Oklahoma City, OK (December 18, 2018) – On December 14, 2018, a securities class action lawsuit was filed in the United States District Court for the District of Connecticut against XPO Logistics, Inc. (NYSE: XPO). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is February 26, 2014 through December 12, 2018. More specifically, this litigation alleged that Defendants made materially false and/or misleading statements during the class period and/or failed to disclose that: (i) XPO’s highly touted aggressive M&A strategy had yielded only minimal returns to the Company; (ii) XPO was utilizing improper accounting practices to mask its true financial condition, including, inter alia, under-reporting of bad debts and aggressive amortization assumptions; and (iii) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On December 12, 2018, Spruce Point Management (“Spruce Point”) published a report regarding XPO, entitled “Trucking Ridiculous; End of the Road”. The Spruce Point report asserted that a “forensic investigation” into XPO had revealed “financial irregularities that conveniently cover [the Company’s] growing financial strain and inability to complete additional acquisitions despite repeated promises.” Spruce Point reported that it had uncovered, among other issues, “concrete evidence to suggest dubious tax accounting, under-reporting of bad debts, phantom income through unaccountable M&A earn-out labilities, and aggressive amortization assumptions: all designed to portray glowing ‘Non-GAAP’ results.” The report further stated that “XPO insiders have aggressively reduced their ownership interest in the Company since coming public, and recently enacted a new compensation structure tied to ‘Adjusted Cash Flow Per Share’ – defined in such a non-standard way that it is practically meaningless.” Following publication of the Spruce Point report, XPO’s stock dropped $15.77 per share to close at $44.50 on December 13, 2018.
Plaintiff seeks to recover damages on behalf of all XPO Logistics, Inc. shareholders who purchased common stock during the Class Period and are therefore a member of the Class as described above. You may move the Court no later than Tuesday, February 12, 2019 to serve as a lead plaintiff for the entire Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.
If you wish to discuss this action, obtain further information and participate in this or any other securities litigation, or should you have any questions or concerns regarding this notice or preservation of your rights, please contact: Robin Hester at firstname.lastname@example.org