October 26, 2016
A shareholder has taken out a lawsuit against the OEM concerning business profits.
Yahoo Finance reported that the lawsuit is on behalf of investors who “purchased or otherwise acquired shares between 23 April 2012 and 23 October 2015” which was the “Class Period”, and that the “shareholder rights litigation firm” Goldberg Law PC will be acting for the plaintiffs. The law firm is calling on any shareholders that “suffered loss during the Class Period” to call them.
It stated that “the class in this case has not yet been certified, and until certification occurs, you are not represented by an attorney. If you choose to take no action, you can remain an absent class member”. The basis of the complaint against Xerox alleges that “during the Class Period, Xerox repeatedly touted its new software product, Health Enterprise, as an important growth area for the Company, which would operate at low cost and high profit margin”.
Additionally, the action said that the company’s statements on profitability were “materially false and misleading” because of failed disclosures about the “existing Health Enterprise projects”, which were facing “major delays and cost overruns”, and that the OEM would be “unable to deliver Health Enterprise implementations at sustainable profits”.
As a result of this, Xerox’s declarations about its “business, operations and prospects lacked a reasonable basis”. The company’s last quarterly results for 2015 were disappointing and this was “due to costs associated with the implementation of Health Enterprise and the termination of Health Enterprise contracts” with the state agencies of California and Montana. Due to the announcement of this, Xerox’s shares fell, “causing investors harm”.
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