21Vianet Group, Inc.
Robbins Arroyo LLP: 21Vianet Group, Inc. (VNET) Accused of Violating Federal Law and Causing Investor Losses
Robbins Arroyo LLP announces that an investor of 21Vianet Group, Inc. (NasdaqGS: VNET) has filed a federal securities fraud class action complaint in the U.S. District Court for the Eastern District of Texas. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between April 21, 2011 and September 10, 2014. 21Vianet provides internet data center services to internet companies, government entities, blue-chip enterprises, and small- to mid-sized enterprises in China.
21Vianet Is Accused of Overstating the Number of Data Center Partnerships with Active Contracts
According to the complaint, shares of 21Vianet dropped over 8%, to close at $20.12 on September 10, 2014, following the publication of a 121-page report titled “A Ponzi Scheme of Acquisitions: 21Vianet Exposed” by Trinity Research Group. Trinity Research Group revealed that the company misrepresented its Internet data center (“IDC”) network assets and performance, misrepresenting the financials of at least some, if not all, of its acquired companies, and that the company derives significant revenue from a business unit known in China as illicit. Specifically, the complaint alleges that 21Vianet lists seventy-two data center partnerships on their IDC network, but thirty-one of these partnerships have been terminated. On September 11, 2014, the company held a conference call attempting to quell the commotion caused by the report. Despite their efforts, 21Vianet stock dropped an additional $4.60, or over 22%, to close at $15.52.
The complaint further alleges that 21Vianet failed to disclose to investors that: (i) the company overstated the number of cabinets in its IDC network; (ii) a significant percentage of their outsourced data center partnerships had been terminated; (iii) the company misrepresented the financials of its managed network entities; (iv) the company’s managed network services business is run illegally; and (v) as a result, 21Vianet’s financial statements were materially false and misleading.
21Vianet Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.