in Newswire Published on December 19, 2017

Liberty Tax, Three Top Execs Pegged with Securities Class Action [UPDATE]

Last Updated on May 8, 2018

Beland v. Liberty Tax, Inc. et al

Filed: December 15, 2017 ◆§ 2:17cv7327

A lawsuit says Liberty Tax and three execs caused stock prices to sag after glossing over/omitting certain 'adverse facts' from quarterly, annual reports.

Defendant(s)

Liberty Tax, Inc.

Law(s)

The Securities Exchange Act of 1934

State(s)

New York

Case Updates

Lawsuit Dismissed

The lawsuit detailed on this page was dismissed on January 17, 2020. The order granting Liberty’s motion to dismiss the case can be found here.

A proposed class action has been filed in New York against Liberty Tax, Inc. and three top executives on behalf of individuals who bought publicly traded securities in the company from June 29, 2016 through December 11, 2017. The plaintiff behind the 21-page lawsuit alleges statements made by the defendants in Liberty Tax’s annual and quarterly reports in 2016 were false and/or misleading because they glossed over and omitted certain “adverse facts” concerning the company’s business and operations. According to the complaint, these allegedly false statements included:

That Liberty Tax’s former CEO (a defendant in this litigation), in the company’s 2016 annual report, created “an inappropriate tone at the top”;

That this “inappropriate tone” led to ineffective entity level controls—internal procedures meant to ensure management directives for an entire company are carried out; and

As a result, the defendants’ statements about Liberty Tax’s overall business, operations and prospects were materially false and/or lacked a reasonable basis.

One of the lawsuit’s main allegations stems from the abrupt resignation of one of the individual defendants—formerly Liberty Tax’s CFO—on November 7, 2017. Upon this news, the lawsuit says, Liberty Tax shares fell more than 16 percent from their previous closing price. A month later, after Liberty Tax announced it would delay filing its quarterly report, shares fell even further, down more than six percent from their previous closing price, the lawsuit says.

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Last Updated on May 8, 2018 — 7:55 PM

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