Velti Slapped with Class Action Lawsuit

Velti Slapped with Class Action LawsuitInvestors are targeting mobile ad tech firm Velti with a new class-action lawsuit.

The basis of the legal action is that the company allegedly misled shareholders over a period of two years by insisting that it could ultimately recover money owed by customers in Greece and Cyprus.

On August 20th, however, Velti announced a write-down of more than $110 million due to its inability to recover the funds in question.

Not surprisingly, this admission sent the company’s stock into a tailspin.

According to Business Insider, the lawsuit was filed last week in the Northern District of California and chiefly takes aim at Velti and three current and former executives.

CEO Alex Moukas, CFO Jeffrey G. Ross, and former CFO Wilson W. Cheung are all cited in the suit.

The woman who filed the complaint, Anika R. Rieckborn, alleges that prior to the write-down, the company had willfully failed to disclose the issues it was having collecting money it was owed, dating back to the prospectus the company issued prior to its January 2011 initial public offering.

Rieckborn’s assertion adds that company officials failed to notify investors (during a May 2012 conference call) of this problem even after it had become painfully clear that the money was never going to be returned.