Booz Allen Hamilton Holding Co. Named in Securities Class Action

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A proposed class action filed in Virginia alleges Booz Allen Hamilton Holding Corporation and its CEO and CFO made false and misleading public statements – and therefore violated federal securities laws – when it failed to:

• Disclose that the management consulting firm “engaged in improper accounting practices” in the course of fulfilling its contracts with the US government;
• Disclose that revenues derived from services provided to the US government were “inflated and unsustainable”; and
• Disclose that regulatory scrutiny and possible criminal punishments could jeopardize its relationship with the US government.

The lawsuit seeks to cover a class of shareholders who bought or acquired Booz Allen securities between May 19, 2016 and June 15, 2017. The suit says these shareholders were injured after an a US Department of Justice investigation became public and Booz Allen’s share prices took a significant hit:

“On June 15, 2017, post-market, Booz Allen disclosed that on June 7, 2017 the company’s subsidiary Booz Allen Hamilton Inc. ‘was informed that the U.S. Department of Justice is conducting a civil and criminal investigation relating to certain elements of its cost accounting and indirect cost charging practices with the US government,” the lawsuit reads. “On this news, Booz Allen’s share price fell $7.43, or 18.89%, to close at $31.90 on June 16, 2017.”