Robbins Umeda LLP Announces an Investigation of Motricity, Inc.
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Motricity, Inc. (NASDAQ: MOTR). Motricity provides mobile data solutions that enable wireless carriers to deliver mobile data services to their subscribers in the United States, the United Kingdom, the Netherlands, and Singapore.
Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Motricity harmed the company and investors by issuing materially false and misleading statements that have damaged the company’s value and reputation. In particular, the firm is investigating allegations that founder and Chief Executive Officer Ryan K. Wuerch, and other fiduciaries at the company, issued improper statements to investors designed to artificially inflate the value of the company. Beginning on June 18, 2010, officials at Motricity issued statements to investors that failed to reflect adverse material facts about the company’s stagnating growth rate, the impact of increased competition from smartphone providers, and declining sales and negative business trends. Also at this time, Motricity’s CEO, along with other senior executives, allegedly engaged in a coordinated insider trading scheme to reap over $11 million in illicit proceeds from stock options sold while the company traded at inflated prices. On August 9, 2011, Motricity announced quarterly results that showed the company was performing well below expectations. On this news, shares of Motricity collapsed 50% to open on August 10, 2011, at just $2.26 per share.
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