Grupo Televisa, S.A.B.
- Company Name
- Grupo Televisa, S.A.B.
- Stock Symbol
- Class Period
- April 11, 2013 to January 25, 2018
- Motion Deadline
- May 4, 2018
- Southern District of New York
The complaint charges Grupo Televisa (“Televisa”) and certain of its officers with violations of the Securities Exchange Act of 1934. Televisa operates media and entertainment businesses in the Spanish speaking world. The Company has interests in television production and broadcasting, programming, direct-to-home satellite services, publishing and publishing distribution, cable television, radio production, show business, feature films and Internet portals.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and operations, including that Televisa executives had engaged in an unlawful bribery scheme involving Fédération Internationale de Football Association (“FIFA”) executives, the discovery of which would likely subject the Company to heightened regulatory scrutiny, and that Televisa had material weaknesses in its internal control over financial reporting. As a result of the foregoing, Televisa’s American Depositary Receipts (“ADRs”) traded at artificially inflated prices during the Class Period, reaching a high of nearly $40 per ADR.
On November 14, 2017, at the corruption trial of three former executives of FIFA, Alejandro Burzaco, a former Chief Executive Officer of the sports-marketing company Torneos y Competencias S.A., testified that Televisa and other media companies had paid multi-million dollar bribes to FIFA executives in order to secure lucrative multi-year broadcasting rights for soccer tournaments. On this news, the price of Televisa ADRs fell $0.48 per share, or 2.4%, to close at $19.50 per share on November 14, 2017.
Then on January 26, 2018, Televisa announced that “the Company’s management, in consultation with the Audit Committee of the Company’s board and after discussions with PricewaterhouseCoopers, S.C., the Company’s independent registered public accounting firm, ha[d] concluded that certain material weaknesses in the Company’s internal control over financial reporting existed as of December 31, 2016.” Specifically, Televisa advised investors that the material weaknesses related to “the design and maintenance of effective controls over certain information technology” and “over segregation of duties within the accounting system, including certain individuals with the ability to gain access to prepare and post journal entries across substantially all key accounts of the Company without an independent review performed by someone other than the preparer,” and “ineffective controls with respect to the accounting for certain revenue and related accounts receivable in our cable companies and content division.” On this news, the price of Televisa ADRs fell $0.29 per share, or 1.38%, to close at $20.66 per share on January 26, 2018.