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Shuffle Master, Inc. may have misled investors about its financial position by improperly allocating revenue to subsidiaries and affiliates to avoid paying US tax.
Investigation Source (Case #07-cv-00715)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- False And Misleading Statements
- Lead Plaintiff Not Chosen
Product or Service
- Investments
Injury Type
- Monetary Loss
Investigation Details
This is a securities fraud class action lawsuit against Shuffle Master, Inc.
The class action lawsuit alleges that Shuffle Master:
(1) improperly inflated Shuffle Master's quarterly earnings per share by 50% and year-end earnings per share by 35%; and
(2) fraudulently booked inter-company transactions arose out of Shuffle Master's tax avoidance scheme, whereby Shuffle Master transferred profits that were otherwise taxable in the U.S., to foreign countries where profits would be taxed at a much lower rate, if at all.
On March 12, 2007, Shuffle Master admitted that it had improperly booked the October 31, 2006 transaction, and that it would have to restate reported results for the fourth quarter and fiscal year end 2006. The company further admitted that its internal controls were defective. In response, Shuffle Master's stock fell 8%.
The class action lawsuit alleges that Shuffle Master:
(1) improperly inflated Shuffle Master's quarterly earnings per share by 50% and year-end earnings per share by 35%; and
(2) fraudulently booked inter-company transactions arose out of Shuffle Master's tax avoidance scheme, whereby Shuffle Master transferred profits that were otherwise taxable in the U.S., to foreign countries where profits would be taxed at a much lower rate, if at all.
On March 12, 2007, Shuffle Master admitted that it had improperly booked the October 31, 2006 transaction, and that it would have to restate reported results for the fourth quarter and fiscal year end 2006. The company further admitted that its internal controls were defective. In response, Shuffle Master's stock fell 8%.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Shuffle Master, Inc. (SHFL) | Shuffle Master, Inc. makes products for the gaming industry. |