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SFX Entertainment (SFXE) Securities Fraud Class Action Lawsuit

This lawsuit alleges that the CEO artificially inflated the SFXE stock price by routinely stating he intended to purchase all remaining shares, but in fact the CEO and the company knew that the CEO would find it impossible to get proper funding for such claims.

What investors are part of this class action? The class period is currently defined as all investors who purchased or otherwise acquired the common stock of SFX Entertainment, Inc. between February 25, 2015 and August 17, 2015, inclusive (the "Class Period"). SFX Entertainment common stock trades on the NASDAQ under the symbol SFXE.

Procedural Status: This lawsuit was filed on September 11, 2015 and is captioned Gutman v. Sillerman, et al. It was filed in the United States District Court for the Southern District of New York. Its civil docket number is 1:15cv07192. The lead plaintiff deadline is November 10, 2015.

SFX Entertainment, Inc. is engaged in the production and promotion of live music festivals and events, production of music tours, selling event tickets through a ticketing platform, merchandising and related services. The entity known as SFX for purposes of this litigation was founded in June, 2012 by defendant CEO Robert Sillerman. The plaintiff alleges that Sillerman and other company officials made materially false and misleading statements in connection with the proposed acquisition of SFX, in which Sillerman would purchase all oustanding common stock shares he did not already own. Specific assertions in the complaint include:

  • On February 25, 2015, Sillerman announced a proposal to acquire all oustanding SFX stock for $4.75 per share,
  • Sillerman continued to affirm his commitment to purchase those shares,
  • Sillerman knew or recklessly disregarded or failed to disclose his lack of financing for the purchase and the unlikelihood that he would be able to acquire it,
  • Sillerman did not actually intend to take the company private, but to sell it in its entirety,
  • Sillerman had made public statements about his willingness to vote his existing shares in favor of any third party purchase offer slightly higher than his own offer, and
  • Sillerman and others initiated and maintained the sham offer in order to attract third party purchasers and mislead prospects about the health of the company and its impending liquidity problems.

The plaintiff alleges that as a result of the foregoing acts and omissions, investors were misled into paying artificially inflated prices for SFX shares, which, at the time of the lawsuit's filing, were trading at roughly fifty cents per share. The precipitous fall in share prices caused by defendants' conduct resulted in significant financial losses for the plaintiffs and others similarly situated, according to the complaint.

http://sfxii.com/

http://www.bloomberg.com/quote/SFXE:US

Article Type: Lawsuit
Topic: Investments

Most Recent Case Event

SFX Entertainment shareholder sues company alleging CEO lied about his ability to buy company

September 11, 2015

Here is the initial complaint.  It alleges that the CEO overstated his ability to raise capital to purchase the outstanding shares of stock of the company.  The CEO's statements artificially inflated the stock price, according to the allegations in the complaint.

sfx_complaint.pdf

Case Event History

SFX Entertainment shareholder sues company alleging CEO lied about his ability to buy company

September 11, 2015

Here is the initial complaint.  It alleges that the CEO overstated his ability to raise capital to purchase the outstanding shares of stock of the company.  The CEO's statements artificially inflated the stock price, according to the allegations in the complaint.

sfx_complaint.pdf
Tags: Buy-Outs Gone Bad, Securities Frauds, Stock Losses, Your Money