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Weatherford, headquartered in Geneva, Switzerland, describes itself as one of the “largest providers of products and services that span the drilling, evaluation, completion, production and intervention cycles of oil and natural gas wells.” The Complaint alleges that throughout the Class Period, defendants,
inter alia, made materially false and misleading statements concerning the remediation of a material weakness in internal controls over its financial reporting and its restated financial statements for 2007 to 2010. Specifically, the Complaint alleges that defendants knew or recklessly failed to inform investors that Weatherford did not properly restate its financial statements from 2007 to 2010; the had not adequately remediated a material weakness in its internal controls over financial reporting of income taxes from 2007 to 2010; and Weatherford failed to properly record and/or report a $225 million in adjustments for financial statements from 2007 to 2010.
On February 21, 2012, the Company disclosed that it was going to adjust its previously reported financial results for the years 2010 and prior by approximately $225 million to $250 million in connection with its previous correction of errors identified in the Company’s accounting for income taxes. On this disclosure, Weatherford stock dropped approximately 13% on the next trading day, falling from a close of $17.79 per share on February 17, 2012 (the last trading day prior to the disclosure) to a close of $15.36 per share on February 21, 2012 (the first trading day after the disclosure), on very heavy trading volume.