LOS ANGELES, June 12, 2012 /PRNewswire/ -- The Lin Law Firm, A Professional Law Corporation, announces that it is investigating potential claims for violations of federal securities laws against ModusLink Global Solutions, Inc. ("ModusLink" or the "Company") (Nasdaq: MLNK), formerly CMGI, Inc. (Nasdaq: CMGI). The investigation focuses on allegations that the Company's statements concerning its business and financial condition made between December 4, 2007 and June 11, 2012, were false and misleading.
On June 11, 2012, ModusLink disclosed that its Audit Committee had initiated an internal investigation relating to the Company's treatment of rebates associated with volume discounts provided by vendors and had determined that certain client contracts were not aligned consistently with ModusLink's practice of retaining volume discounts. The Audit Committee also identified instances where vendor costs incurred were marked-up to clients in a manner not consistent with client contracts. As such, the Company expects to restate its audited financial statements from fiscal years 2009 through 2011, as well as the first two quarters of fiscal 2012 and its unaudited selected financial data for fiscal years 2007 and 2008. As a result of the restatement, the Company expects to report downward adjustments to revenue and net income over the period, and Management expects to conclude that the Company has a material weakness in its internal control over financial reporting. ModusLink also disclosed the retirement of Joseph C. Lawler, President and CEO of the Company, and the departure of William R. McLennan, president of global operations, effective immediately.
Following these disclosures, ModusLink shares fell approximately 35%, from $4.26 per share on June 8, 2012, the last trading day before the disclosures, to $2.78 per share on June 11, 2012, on unusually high volume.
If you purchased ModusLink or CMGI securities between December 4, 2007 and June 11, 2012 and suffered a loss, and wish to discuss these matters or have any questions concerning this announcement or your rights, please contact Elizabeth Lin, Esq., The Lin Law Firm, toll-free at (866) 864-3898, or by email to elizabethL@thelinlawfirm.com.The Lin Law Firm is a litigation law firm committed to representing investors nationwide in securities matters and protecting investors against corporate wrongdoing. For additional information, please visit www.thelinlawfirm.com. This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.