Groupon Inc. (NASDAQ:GRPN) is mandated to pay $45 million to its shareholders after Judge Charles Norgle, US District Court for the Northern District of Illinois, granted the approval of the class settlement on Wednesday morning.
Shareholders vs. Groupon
In line with the purported securities fraud, the lawsuit against Groupon was filed by shareholders in 2012. Fan Zhang, one of the company shareholders, led the lawsuit. Accordingly, Zhang purchased 3,000 shares worth about $62,000 in February of that year. The next month, Zhang sold them for just nearly $52,000.
Prior to the filing of the lawsuit, the The Securities & Exchange Commission (SEC) already reviewed Groupon’s Q4 2011 filings. However, the SEC did not take any further actions.
The company had finally agreed to a class settlement earlier this year.
According to Pomerantz LLP, the lead counsel of the shareholders and one of today’s most trusted litigation firms, the class settlement is nearly 35% of the estimated damages for all claims. Class members can receive $1.12 per share with certain attorney’s fee deductions, as revealed by Pomerantz in May.
Qualified shareholders— those who purchased shares in the company’s initial public offering (IPO)— can file their claims until August 26. Forms, documents, and other reminders can be accessed on the official website of the class settlement at http://grouponsecuritieslitigation.com.
Groupon, spearheaded by Andrew Mason as the CEO in 2011, launched its IPO to the public at $20 on November 4 of the said year. During its first day in the market, Groupon reached an all-time high of $31. However, the stock did not sustain the success for far too long. Groupon subsequently fell and had never recouped from lows since then.
The motion noted that the achieved class settlement reiterates the lead counsel’s “hard-fought litigation” and dedicated negotiation to reach a reasonable class action recovery. As Joshua Silverman, a Pomerantz partner, said in behalf of the firm, he is delighted to have finally received the long-awaited approval of the US District Court. Meanwhile, Groupon declined to comment on the matter.