Chief Judge Freda L. Wolfson, in the District of New Jersey, has upheld securities fraud claims asserted against Synchronoss Technologies, Inc. and its former Chief Financial Officer, Karen L. Rosenberger, arising from alleged accounting violations that forced Synchronoss to restate three years of financial statements. On behalf of Lead Plaintiff the Employees’ Retirement System of the State of Hawaii and a proposed class of Synchronoss investors, G&E filed a securities fraud complaint alleging that the company’s revenue recognition procedures and controls were deficient, resulting in premature recognition of revenue and inflated financial reports. The complaint alleges that Synchronoss and Rosenberger repeatedly violated accounting rules for revenue recognition and misrepresented the company’s financial performance to investors during the class period of October 28, 2014 to June 13, 2017, and that the stock price dropped precipitously from over $30 per share to under $12 per share once the misrepresentations were corrected.
The class action seeks to recover damages for persons who purchased Synchronoss securities during the class period. Judge Wolfson’s detailed opinion rejecting Synchronoss’ and Rosenberger’s dismissal arguments is available here.