RADNOR, Pa.–(BUSINESS WIRE)–The law firm of Kessler Topaz Meltzer & Check, LLP announces that a securities fraud class action lawsuit has been filed in the United States District Court for the Southern District of New York against Ebix, Inc. (NASDAQ: EBIX) (“Ebix”) on behalf of those who purchased or acquired Ebix securities between November 9, 2020 and February 19, 2021, inclusive (the “Class Period”).
Investors who purchased or acquired Ebix securities during the Class Period may, no later than April 23, 2021, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or Adrienne Bell, Esq. (484) 270-1435; toll free at (844) 887-9500; via e-mail at email@example.com; or click https://www.ktmc.com/ebix-inc-securities-class-action-lawsuit?utm_source=PR&utm_medium=link&utm_campaign=ebix
Ebix supplies infrastructure exchanges to the insurance, financial, travel, cash remittances, and healthcare industries.
The Class Period commences on November 9, 2020, when Ebix filed its quarterly report for the period ended September 30, 2020 on a Form 10-Q with the SEC, stating in relevant part that the “Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our ‘disclosure controls and procedures’ . . . [and] have concluded that these disclosure controls and procedures are effective.”
On February 19, 2021, after the market closed, Ebix revealed that its independent auditor, RSM US LLP (“RSM”), resigned “as a result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions that occurred in the fourth quarter of 2020” related to Ebix’s gift card business in India. RSM also stated that there was a material weakness related to Ebix’s failure to design controls “over the gift or prepaid card revenue transaction cycle sufficient to prevent or detect a material misstatement.” Additionally, Ebix and RSM disagreed over the accounting treatment of $30 million that had been transferred into a commingled trust account of Ebix’s outside legal counsel in December 2020.
Following this news, Ebix’s share price fell $20.24, or approximately 40%, to close at $30.50 on February 22, 2021.
The complaint alleges that, throughout the Class Period, the defendants failed to disclose to investors that: (1) there was insufficient audit evidence to determine the business purpose of certain significant unusual transactions in Ebix’s gift card business in India during the fourth quarter of 2020; (2) there was a material weakness in Ebix’s internal control over the gift or prepaid revenue transaction cycle; (3) Ebix’s independent auditor, RSM, was reasonably likely to resign over disagreements with Ebix regarding $30 million that had been transferred into a commingled trust account of Ebix’s outside legal counsel; and (4) as a result of the foregoing, the defendants’ positive statements about Ebix’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Ebix investors may, no later than April 23, 2021, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check, LLP. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.