Groupon Gets Hit With First Shareholder Lawsuit
It is rumored that Groupon will be investigated by the SEC for the third time over questionable accounting practices. A man in Chicago is seeking compensation on behalf of Groupon shareholders that were allegedly tricked into buying Groupon’s stock at high prices.
The accounting issues stem on the company’s failure to set aside reserves for customers that are seeking refunds through the “Groupon Promise” program. Groupon started offering more expensive daily deals while also promising generous refund promises.
The plaintiff behind the lawsuit is Fan Zhang, who says that Groupon violated federal securities law after making misleading statements that led him to buy 3,000 shares for $61,800 in February. Zhang is specifically going after Groupon, Andrew Mason, executives and directors at the company, and merchant banks like Goldman Sachs.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry