Search By:
Products
Injury
Topic
Company
Industry
Cbeyond may have misrepresented its financial condition and business prospects in part so the founder and CEO could unload $39 million of his stock at artificially inflated prices.
Investigation Source (Case #08-cv-01666)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- False And Misleading Statements
- Insider Selling/Undisclosed Related Party Transactions
Product or Service
- Investments
Injury Type
- Monetary Loss
Investigation Details
This is a securities fraud class action lawsuit against Cbeyond and its founder, Chairman, President and CEO.
The class action lawsuit alleges that beginning on November 1, 2007, Cbeyond made specific misstatements designed to hide the fact that Cbeyond was recording a higher churn rate for its services, which permitted certain of Cbeyond's officers and directors to engage in insider sales of $39 million of Cbeyond stock at artificially inflated prices.
Shortly thereafter, Cbeyond was forced to admit on February 21, 2007 that it elected to make certain operational changes that caused its churn rate to climb even higher, contrary to its prior representations. Cbeyond's stock price dropped 20% on this shocking news.
The class action lawsuit alleges that beginning on November 1, 2007, Cbeyond made specific misstatements designed to hide the fact that Cbeyond was recording a higher churn rate for its services, which permitted certain of Cbeyond's officers and directors to engage in insider sales of $39 million of Cbeyond stock at artificially inflated prices.
Shortly thereafter, Cbeyond was forced to admit on February 21, 2007 that it elected to make certain operational changes that caused its churn rate to climb even higher, contrary to its prior representations. Cbeyond's stock price dropped 20% on this shocking news.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Cbeyond, Inc. (CBEY) | Cbeyond, Inc. provides voice over IP communications services to small businesses in the United States. |