PHILADELPHIA, Feb. 23, 2021 (GLOBE NEWSWIRE) — Kehoe Law Firm, P.C. is investigating potential securities claims on behalf of investors of Ebix, Inc. (“Ebix” or the “Company”) (NASDAQ:EBIX) to determine whether the Company engaged in securities fraud or other unlawful business practices.
INVESTORS WHO PURCHASED, OR OTHERWISE ACQUIRED, EBIX SECURITIES BETWEEN NOVEMBER 9, 2020 AND FEBRUARY 19, 2021 (THE “CLASS PERIOD”) AND SUFFERED LOSSES GREATER THAN $100,000 ARE ENCOURAGED TO COMPLETE KEHOE LAW FIRM’S SECURITIES CLASS ACTION QUESTIONNAIRE OR CONTACT KEVIN CAULEY, DIRECTOR, BUSINESS DEVELOPMENT, (215) 792-6676, EXT. 802, KCAULEY@KEHOELAWFIRM.COM, SECURITIES@KEHOELAWFIRM.COM, INFO@KEHOELAWFIRM.COM, TO DISCUSS THE SECURITIES CLASS ACTION INVESTIGATION OR POTENTIAL LEGAL CLAIMS.
A class action lawsuit has been filed on behalf of Ebix shareholders in United States District Court, Southern District of New York. According to the complaint, during the Class Period, the Ebix Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.
The Ebix Defendants, allegedly, failed to disclose to investors that: (1) there was insufficient audit evidence to determine the business purpose of certain significant unusual transactions in Ebix’s gift card business in India during the fourth quarter of 2020; (2) there was a material weakness in the Company’s internal controls over the gift or prepaid revenue transaction cycle; (3) the Company’s independent auditor was reasonably likely to resign over disagreements with Ebix regarding $30 million that had been transferred into a commingled trust account of Ebix’s outside legal counsel; and (4) as a result of the foregoing, the Ebix Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On February 19, 2021, Ebix announced that “[b]y letter dated February 15, 2021, RSM US LLP (‘RSM’) notified the Audit Committee of the Board of Directors (the ‘Audit Committee’) of Ebix, Inc. . . . of its resignation as the Company’s independent registered public accounting firm.”
According to Ebix, “. . . RSM told the Chairman of the Company’s Audit Committee during a telephone call that RSM was resigning as the Company’s independent registered public accounting firm, effective immediately. RSM then advised the Chairman on the call that it was resigning as a result of being unable, despite repeated inquiries, to obtain sufficient appropriate audit evidence that would allow it to evaluate the business purpose of significant unusual transactions that occurred in the fourth quarter of 2020, including whether such transactions have been properly accounted for and disclosed in the financial statements subject to the Audit.” Ebix also reported that “RSM informed the Chairman that the unusual transactions concerned the Company’s gift card business in India.”
On this news, Ebix shares fell by as much as 27% during after-hours trading on February 19, 2021, thereby injuring Ebix investors. Ebix investors were further harmed when Ebix stock fell approximately 40% on February 22, 2021.
Kehoe Law Firm, P.C., with offices in New York and Philadelphia, is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors from securities fraud, breaches of fiduciary duties, and corporate misconduct. Combined, the partners at Kehoe Law Firm have served as Lead Counsel or Co-Lead Counsel in cases that have recovered more than $10 billion on behalf of institutional and individual investors.
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