Robbins Arroyo LLP: AECOM (ACM) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against AECOM (NYSE: ACM) in the U.S. District Court for the Central District of California. The complaint is brought on behalf of all purchasers of AECOM securities between February 11, 2015 and August 15, 2016, for alleged violations of the Securities Exchange Act of 1934 by AECOM’s officers and directors. AECOM, together with its subsidiaries, engages in designing, building, financing, and operating infrastructure assets worldwide.
AECOM Accused of Overstating the Benefits of Its Acquisition
According to the complaint, on February 10, 2015, AECOM submitted a Form 8-K with the U.S. Securities and Exchange Commission, stating “We are pleased with our organic growth as we focus on the successful integration of our acquisition of URS [Corp].” The company further touted that it started the year by delivering strong free cash flow and reported revenue of $4.19 billion for the quarter, compared to revenue of $1.95 billion for the same period in the prior year. AECOM submitted several subsequent filings reiterating the information previously announced and reporting strong financial and operating results, again emphasizing that the company’s strong cash flow and debt reduction kept it on track with its capital allocation priorities. The complaint alleges, however, that AECOM officials failed to disclose that AECOM: (i) engaged in fraudulent and deceptive business practices; (ii) lacked effective internal controls over financial reporting; (iii) overstated the benefits of the URS acquisition; and (iv) overstated the company’s free cash flow per share.
On August 16, 2016, Spruce Point Capital Management published a report on AECOM stating that Spruce had analyzed the company’s recent financial results and condition and believed that AECOM’s stock is worth approximately 33%-45% less than its current price. The report cited AECOM management’s “misaligned incentive structure,” noting that AECOM’s Chief Executive Officer’s $18 million compensation in 2015 was heavily tied to the company’s aggressive interpretation of its free cash flow per share. The report further noted that AECOM had changed (and inflated) its earnings per share definition three times since selling investors on the URS acquisition, and that free cash flow was overstated by approximately 90% in the last twelve months ending June 30. On this news, AECOM stock fell $1.65 per share, or 4.7%, to close at $33.44 per share on August 16, 2016.
AECOM 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.