Robbins Arroyo LLP: MobileIron, Inc. (MOBL) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a federal securities fraud class action complaint was filed in the Superior Court of the State of California, County of Santa Clara. The complaint alleges that officers and directors of MobileIron, Inc. (NASDAQGS: MOBL) violated the Securities Act of 1933 by making materially false and misleading statements about MobileIron’s business prospects. The class action is filed on behalf of those who purchased MobileIron securities pursuant to the company’s Registration Statement and Prospectus issued in connection with its initial public offering (“IPO”) on June 12, 2014. MobileIron provides a purpose-built mobile IT platform that enables enterprises to secure and manage mobile applications, content, and devices while providing their employees with device choice, privacy, and a native user experience.
MobileIron Fails to Disclose Major Security Breach
According to the complaint, MobileIron officials deceived the investing public and caused the price of its securities to be sold at artificially inflated prices. Specifically, MobileIron’s Registration Statement omitted material information that was required to be disclosed—namely, that the company had recently been hacked and that its platform was vulnerable to security bugs. MobileIron went public on June 12, 2014, at $9.00 per share, and quickly traded up to close its first day of public trading at $11.02 per share. The following day, online insurance news journal PostOnline.co.uk published a story detailing that MobileIron’s customer, Aviva plc, had its employees’ mobile devices hacked. MobileIron was quoted as downplaying the event as an isolated incident.
Then, on June 23, 2014, a news article published by TheRegister.co.uk stated that on May 20, 2014, a hacker compromised the MobileIron administrative server and performed a “full wipe” of many of the mobile devices used by Aviva personnel. An Aviva employee revealed in the article that the breach caused the company millions in damages. In the wake of the incident, Aviva moved its impacted personnel onto a Blackberry service and entered discussions with MobileIron’s reseller Esselar to cancel their contract. Despite the fact that the breach occurred weeks before MobileIron’s IPO, the Offering Materials failed to disclose the breach, Aviva moving to Blackberry’s services, and the likely impact that the publication of the breach would have on MobileIron’s ability to secure contracts with large customers and keep customers on its perpetual licensing revenue model.
On April 22, 2015, MobileIron issued a press release announcing an inability to close multiple large deals from North American customers and a large shift by customers to its monthly subscription model, which resulted in lower billings and revenue. On the same day, the company issued another press release stating that its Chief Financial Officer was resigning. On this news, MobileIron stock fell $2.39 per share, or over 25%.
MobileIron 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.