GTT Communications, Inc. Class Action Lawsuit
- Company Name
- GTT Communications, Inc.
- Stock Symbol
- Class Period
- May 5, 2016 to November 9, 2020
- Central District of California
The GTT Communications, Inc. class action lawsuit charges GTT Communications and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of GTT Communications securities between May 5, 2016 through November 9, 2020, inclusive (the “Class Period”). The GTT Communications class action lawsuit was commenced on January 12, 2021 in the Central District of California and is captioned Frank Roth Beteiligungs GmbH v. GTT Communications, Inc., No. 21-cv-00270.
GTT Communications operates a global communications network, providing telecommunications services to large, multinational enterprises, carriers, and governments across five continents.
The GTT Communications class action lawsuit alleges that, throughout the Class Period, defendants made false and/or misleading statements and/or failed to disclose: (1) GTT Communications’ internal controls suffered from issues related to the recording and reporting of Cost of Telecommunications Services; (2) GTT Communications’ previously reported Cost of Telecommunications was inaccurate or accounted for unsupported adjustments; (3) inadequate internal controls would result in delays in GTT Communications’ 10-Q quarterly reports; and (4) as a result of the foregoing, defendants’ public statements were materially false and/or misleading and/or lacked a reasonable basis.
On August 10, 2020, after market hours, GTT Communications filed with the U.S. Securities and Exchange Commission (“SEC”) an NT 10-Q notification of inability to timely file Form 10-Q for the quarter ended June 30, 2020 (“2Q NT 10-Q”). GTT Communications’ 2Q NT 10-Q stated that “[i]n the course of closing the Company’s books for the quarter ended June 30, 2020, the Company identified certain issues related to the recording and reporting of Cost of Telecommunications Services and related internal controls” and that “[t]he Company’s management and the Audit Committee, with assistance from outside counsel and consultants, are reviewing (the ‘Review’) these issues and assessing the effect, if any, on the Company’s financial statements for the quarter ended June 30, 2020 and previously issued financial statements, as well as whether there are any material weaknesses in the Company’s internal controls.” On this news, the price of GTT Communications’ shares fell more than 11%.
On November 9, 2020, GTT Communications filed with the SEC an NT 10-Q notification of inability to timely file Form 10-Q for the quarter ended September 30, 2020 (“3Q NT 10-Q”). GTT Communications had yet to file a 10-Q for its second quarter. GTT Communications’ 3Q NT 10-Q stated that “in the course of closing the Company’s books for the quarter ended June 30, 2020, the Company identified certain issues related to the recording and reporting of Cost of Telecommunications Services and related internal controls.” GTT Communications’ 3Q NT 10-Q further stated that “the Review . . . has identified a number of issues in connection with the Company’s previously issued financial statements, including: (i) adjustments made without adequate support to Cost of Telecommunications Services during the year ended December 31, 2019 and the three months ended March 31, 2020 . . . and (ii) failures during the years ended December 31, 2018 and 2017 to recognize certain expenses on the Company’s income statement by recording such expenses to goodwill.” GTT Communications’ 3Q NT 10-Q also stated that “the Company is also reassessing its previous conclusions regarding the effectiveness of its internal control over financial reporting.” On this news, the price of GTT Communications’ shares fell once more, further damaging investors.
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