Lawsuit: Tech Data’s Misleading Financial Statements Injured Stockholders

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A proposed securities class action has been filed against Tech Data Corporation and two of the company’s top executives over claims that they failed to disclose material information to stockholders concerning the Tech Data’s performance and financial outlook for the first half of 2017. The suit alleges that when the company reported its first-quarter results, the defendants praised the purported success of a recent acquisition and disclosed positive financial expectations for the next quarter. On August 31, 2017, however, the company released its second-quarter results and reportedly admitted that Tech Data “was experiencing execution and operational issues” that negatively impacted its earnings for that quarter. Upon this news, company stock prices fell 20.69 percent, according to the complaint.

The suit alleges that the defendants knew about and failed to disclose to stockholders the operational issues that Tech Data was experiencing and instead published false and misleading statements that artificially inflated stock prices for the period between June 1, 2017 and August 31, 2017. When the truth finally emerged, the plaintiff argues, Tech Data stockholders were financially injured from the resulting drop in stock prices.