Shareholder rights law firm Johnson & Weaver, LLP is investigating whether certain officers and directors of The ADT Corporation (NYSE:ADT) violated state or federal laws in connection with statements issued regarding ADT’s business, operations, financial prospects and share buyback program. The investigation will also focus on the circumstances surrounding a multi-billion dollar buyback program.
In late 2012, Keith Meister, founder of hedge fund Corvex Management LP, announced that Corvex owned 5% of the ADT shares, publicly announced a target price of $61 per share, and joined the Company’s board of directors. Around the same time, the board of directors authorized a $2 billion buyback. In November 2013, ADT agreed to repurchase 10.24 million shares from Corvex at $44.01 or $450.7 million, a premium of 29% over the January 30, 2014 closing price. During this same time frame, Meister suddenly resigned from ADT’s board.
On January 30, 2014, before the markets opened, ADT issued a press release announcing its 2014 first quarter financial results. The Company reported significantly lower results than the investment community expected based on the Company’s prior guidance. ADT CEO Naren Gursahaney said, "Customer growth did not meet our expectations this quarter and we have implemented actions, including improvements in our dealer channel and lead generation process, to regain subscriber traction in the future." On the news ADT stock plummeted $6.41 or 17%, to $31.40.
This investigation will determine if shareholders of ADT were misled by the timing of released information and the exclusion of material facts regarding business operations and future outlook. Additionally, the investigation will scrutinize the stock buyback program and the timing of the $450.7 million repurchase of shares from Corvex to determine if shareholders were harmed.If you have information that could assist in this investigation, or if you are a ADT shareholder and are interested in learning more about the investigation or your legal rights and remedies, please contact Jim Baker ( firstname.lastname@example.org) by email or by phone at 619-230-0063, Ext. 118. Johnson & Weaver, LLP is a nationally recognized shareholders’ rights law firm. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits. For more information about the firm and its attorneys, please visit http://www.johnsonandweaver.com. Attorney advertising. Past results do not guarantee future outcomes.