A California federal judge is moving forward with a proposed LeapFrog investor lawsuit. The class action accuses the children’s educational game manufacturer LeapFrog Enterprises Inc. – along with its top executives – of hiding demand and inventory issues that caused executives to issue a $36.5 million asset write-down.
Last September, investors alleged in their amended complaint that the LeapFrog CEO and chief financial officer were overly optimistic about earnings expectations and other financial matters. This past week, the judge dismissed part of the LeapFrog investor lawsuit, but said investors adequately pled claims that LeapFrog told investors that its long-term assets were not impaired – only to announce the multimillion-dollar write down shortly thereafter.
In a matter of only two months, executives “failed to explain why…they changed their view on long-lived assets from no impairment to a 96% impairment,” according to the judge’s written order.
Litigation began in 2015 after the company announced that its third quarter results were lower than anticipated. As a result, shareholders felt that the company kept share prices artificially high by concealing logistical issues plaguing the launch of its new LeapTV video game system, and failing to report that many of their products were not selling.
Involved in the LeapFrog Investor Lawsuit?
If you invested with LeapFrog Enterprises Inc. or invested in another company that kept material information from you and you experienced a loss as a result, you may have certain legal rights that require your immediate attention.
Call a Los Angeles Securities Fraud Attorney Today
Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.