Newman Ferrara LLP is conducting an investigation on behalf of shareholders of KIT digital, Inc. (“KIT”) (Nasdaq) (“KITD”) into potential violations of federal securities laws and breaches of fiduciary duty by KIT and certain of its officers and directors.
On November 21, 2012, KIT announced that on November 15, 2012, the Audit Committee of KIT’s Board of Directors concluded that, because of errors and irregularities in KIT’s financial statements, KIT needed to restate its financial statements for each of the first three quarters and full years in 2009, 2010 and 2011 and for the first two quarters of 2012. KIT stated that the accounting errors and irregularities relate primarily to the improper recognition of revenue from perpetual license agreements entered into in 2010 and 2011. KIT reported that it could not timely file its financial results for the fourth quarter of 2012 and cancelled its 2012 annual stockholder meeting. KIT cautioned that it “cannot currently quantify the potential impact of the restatement.”
On this news, shares of KIT stock plummeted 64% in value to a November 23, 2012 closing price of $0.74 per share. KIT stock dropped another 16% on the following trading day to a November 26 closing price of $0.62 per share.
On November 23, 2012, KIT’s former Chief Executive Officer, Kaleil Tuzman, sent KIT’s Board a letter criticizing KIT’s management for its “deficient management and poor business execution” and offering to purchase KIT for $3.75 per share in cash.Shareholders of KIT stock are encouraged to contact Newman Ferrara attorney Roy Shimon at (212) 619-5400 or email@example.com to discuss this investigation and their rights as KIT shareholders. Whistleblowers: Persons with knowledge that may aid in the investigation of this matter are encouraged to contact the firm. Under the Dodd-Frank Wall Street Reform Bill, whistleblowers are protected from employer retaliation and may be entitled to as much as 30 percent of the recovery if the information provided leads to a successful action. Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation, securities fraud and shareholder litigation, consumer protection, civil rights, and real estate. For more information, please visit the firm website at www.nfllp.com.