Labaton Sucharow Files Class Action Lawsuit on Behalf of Xerox Corporation InvestorsNEW YORK (October 24, 2016) – Labaton Sucharow LLP (Labaton Sucharow) announced today that on October 21, 2016, the Firm filed a securities class action lawsuit on behalf of Oklahoma Firefighters Pension and Retirement System (Oklahoma Fire) against Xerox Corporation (Xerox or the company), and certain of its senior executives (collectively, the defendants). The action, Oklahoma Firefighters Pension and Retirement System v. Xerox Corporation, No. 16-cv-08260 (S.D.N.Y.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act), and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired Xerox common stock between April 23, 2012 and October 23, 2015, inclusive (the class period).
The complaint alleges that during the class period, the defendants violated provisions of the Exchange Act by issuing false and misleading statements regarding the profitability and growth prospects of an important software product called Health Enterprise—designed to assist state agencies administer their respective Medicaid programs. Xerox is a global provider of document processing services and printing machines. Beginning in 2009, as the company’s hardware products became less profitable, Xerox embarked on a new corporate strategy to transition into more of a computer services-related company. As part of Xerox’s computer services transition strategy, it acquired Affiliated Computer Services, Inc. for $6.4 billion in February 2010. Through the acquisition, Xerox took over the Health Enterprise product, which provides software solutions for states to manage all aspects of their contemporary Medicaid programs and to do so in accordance with government rules and regulations.
During the class period, Xerox repeatedly touted the Health Enterprise business as an important growth area for the company, which would operate at low cost and high profit margin. However, the defendants’ class period statements pertaining to the profitability and growth prospects of the Health Enterprise business were materially false and misleading because the defendants failed to disclose that: (1) the company’s existing Health Enterprise projects were experiencing major delays and cost overruns; (2) the company would be unable to deliver Health Enterprise implementations at sustainable profits; and (3) as a result, the company’s positive statements about its business, operations, and prospects lacked a reasonable basis.
Beginning in late 2014, this truth began to be revealed in a series of disclosures that exposed implementation delays, cost overruns, and customer disputes. Finally, in October 2015, two key state agencies terminated Health Enterprise contracts with Xerox. By then, Xerox had taken more than $500 million in related asset write-downs. In reaction to these revelations, Xerox’s stock lost hundreds of millions of dollars in market capitalization, with the company’s stock price falling from a class period closing high of $13.57 per share on December 5, 2014, to close at $9.01 per share on October 27, 2015.
If you purchased or acquired the publicly traded common stock of Xerox during the class period, you are a member of the class and may be able to seek appointment as lead plaintiff. Lead plaintiff motion papers must be filed with the U.S. District Court for the Southern District of New York no later than December 23, 2016. The lead plaintiff is a court-appointed representative for absent members of the class. You do not need to seek appointment as lead plaintiff to share in any class recovery in this action. If you are a class member and there is a recovery for the class, you can share in that recovery as an absent class member. You may retain counsel of your choice to represent you in this action.
If you would like to consider serving as lead plaintiff or have any questions about this lawsuit, you may contact Francis P. McConville, Esq. of Labaton Sucharow, at (800) 321-0476, or via email at firstname.lastname@example.org.