Robbins Arroyo LLP: Starz (STRZA, STRZB) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed in the U.S. District Court for the Central District of California. The complaint alleges that officers and directors of Starz (NASDAQGS: STRZA, STRZB) violated the Securities Exchange Act of 1934 between August 1, 2014 and October 29, 2015, by making materially false and misleading statements about Starz’s business prospects. Starz, through its subsidiaries, operates as a media and entertainment company.
Starz Accused of Engaging in Illicit Business Practices
According to the complaint, during 2014 and 2015, Starz filed several Form 10-Qs and a Form 10-K with the U.S. Securities and Exchange Commission, attesting to the accuracy of its internal controls over financial reporting. The complaint alleges that these documents were misleading because Starz failed to disclose that the company lacked adequate internal controls and that its contract with Comcast Corporation (“Comcast”) was a result of illicit business practices.
On October 29, 2015, online magazine Deadline Hollywood revealed that the company’s former Senior Vice President of Sales and Affiliate Marketing, Keno Thomas, filed a lawsuit against the company and its subsidiaries, the company’s Chief Executive Officer, Christopher Albrecht, the company’s Chief Revenue Officer, Michael Thornton, and Liberty Media Corp. The lawsuit alleges that the company’s contract with Comcast was the result of illicit business practices. Further, Thomas alleges that the company’s senior management instructed him to fabricate revenue and subscriber information so that Thornton and Albrecht could present those falsified figures to the company’s Board of Directors, which would allow them to have plausible deniability in case the Board realized the revenue figures were fabricated. The company retaliated against Thomas for refusing to fabricate this information. On this news, STRZA stock fell $3.69 per share, or over 9%, to close at $33.51 per share on October 30, 2015, and STRZB stock fell $4.98 per share, or over 13%, to close at $32.73 per share on October 30, 2015.
Starz 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.