On June 18, 2012, Wolf Haldenstein Adler Freeman & Herz LLP filed a class action lawsuit in the United States District Court, District of Massachusetts, on behalf of all persons who purchased the common stock of ModusLink Global Solutions, Inc. (“ModusLink” or the “Company”) (NASDAQ: MLNK) between September 26, 2007 and through and including June 8, 2012 (the “Class Period”), against the Company and certain of the Company’s current and former officers and directors, alleging fraud pursuant to Sections 10(b) and 20(a) of the Exchange Act [15 U.S.C. §§ 78j(b) and 78t(a)] and Rule 10b-5 promulgated thereunder by the SEC [17 C.F.R. § 240.10b-5] (the “Class”).
The case name is styled Shnerer v. Lawler, et al., Case 1:12-cv-11078. A copy of the complaint filed in this action is available from the Court, or can be viewed on the Wolf Haldenstein Adler Freeman & Herz LLP website at www.whafh.com.
The complaint alleges that Defendants knew or recklessly disregarded numerous facts known to them during the Class Period concerning the Company’s profitability, business and accounting practices. It is further alleged that Defendants continually issued statements in its SEC filings that were materially false and misleading. Specifically:
a) The Company’s scheme was to aggregate its business in order to acquire volume discounts from vendors, and then mark up the discounts to clients without their knowledge, inconsistent with their contracts, and incorrectly account for these discounts and mark-ups as revenue;b) All of the press releases and Form 10-Ks and Form 10-Qs issued by the Company and the Individual Defendants during the Class Period were materially false and misleading because they did not accurately reflect the Company’s treatment of rebates associated with volume discounts by vendors; and c) Defendants continually made false and materially misleading statements and omissions during the Class Period concerning the Company’s treatment of rebates associated with volume discounts provided by vendors, vendor costs which were marked-up to clients in a manner not consistent with client contracts, volume discounts and mark-ups incorrectly accounted for as revenue, the Company’s accounting practices, generally, and the Company’s revenue and net income.