Hagens Berman Sobol Shapiro LLP, a national investor-rights law firm, reminds investors that two weeks remain until the Jan. 14, 2014 deadline to move to be a lead plaintiff in the securities fraud class-action lawsuit filed against Tile Shop Holdings, Inc. (“Tile Shop”) (NASDAQ: TTS). Investors who suffered significant financial losses may contact a Hagens Berman attorney working on the investigation by contacting TTS@hbsslaw.com.
The class-action securities fraud suit was filed on behalf of investors who purchased Tile Shop securities between Aug. 22, 2012 and Nov. 13, 2013 (the “class period”). Tile Shop investors affected by the alleged fraud may contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling 510-725-3000. Additional information is available at http://hb-securities.com/investigations/TTS.
The lawsuit and continuing investigation centers around allegations made in a report published by short-seller firm Gotham City Research LLC on Nov. 14, 2013. The report claims the company exaggerated its 2013 earnings by more than 200 percent; failed to disclose that Beijing Pingxiu (BP), the company’s largest supplier, is secretly controlled by the brother-in-law of Tile Shop’s CEO; and used BP to purchase materials at or near cost in order to exaggerate its inventory and profits.
Following the release of the report, Tile Shop’s stock price fell from a close of $21.22 on Nov. 13, 2013 to a close of $12.95 the next day, causing Citigroup to subsequently downgrade the company’s rating from buy to neutral on Nov. 18, 2013.Gotham City’s report concluded that Tile Shop shares were dramatically overvalued and the company will be forced to restate the past several years’ financial results. Persons with non-public information should consider their options to help in the investigation or take advantage of the SEC whistleblower program. Under the new SEC whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC.