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AUDITOR DISAGREES WITH EBIX; INVESTOR LAWSUIT PENDING: Glancy Prongay & Murray LLP Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Ebix, Inc.

·4 min read

Glancy Prongay & Murray LLP ("GPM") reminds investors of the upcoming April 23, 2021 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired Ebix, Inc. ("Ebix" or the "Company") (NASDAQ: EBIX) securities between November 9, 2020 and February 19, 2021, inclusive (the "Class Period").

If you suffered a loss on your Ebix investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/ebix-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at shareholders@glancylaw.com to learn more about your rights.

On February 19, 2021, after the market closed, Ebix revealed that its independent auditor, RSM US LLP ("RSM"), resigned "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" related to the Company’s gift card business in India. RSM had also stated that there was a material weakness related to Ebix’s failure to design controls "over the gift or prepaid card revenue transaction cycle sufficient to prevent or detect a material misstatement." In addition, Ebix and RSM disagreed over the accounting treatment of $30 million that had been transferred into a commingled trust account of Ebix’s outside legal counsel in December 2020.

On this news, the Company’s share price fell $20.24, or approximately 40%, to close at $30.50 on February 22, 2021, on unusually heavy trading volume.

Then, on February 23, 2021, a letter from RSM was filed with the SEC, disagreeing with Ebix’s characterization of events. Specifically, RSM stated that it had a "disagreement pursuant to Item 304(a)(i)(iv)" because it had "repeatedly told the Company that the $30 million that the Company transferred on December 31, 2020 to an account of its legal counsel could not be classified as a cash or cash equivalent on its balance sheet." RSM also clarified that "if the information repeatedly requested by RSM – but which was not provided by the Company – related to gift cards issued by ItzCash/EbixCash in the fourth quarter of 2020 was further investigated, it might materially impact the fairness or reliability of the financial statements."

On this news, the Company’s share fell $7.30, or nearly 24%, to close at $23.20 per share on February 23, 2021.

Throughout the Class Period, 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. Specifically, Defendants failed to disclose to investors: (1) that 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) that there was a material weakness in the Company’s internal controls over the gift or prepaid revenue transaction cycle; and (3) that 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) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

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If you purchased or otherwise acquired Ebix securities during the Class Period, you may move the Court no later than April 23, 2021 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to shareholders@glancylaw.com, or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210223006159/en/

Contacts

Glancy Prongay & Murray LLP, Los Angeles
Charles Linehan, 310-201-9150 or 888-773-9224
shareholders@glancylaw.com
www.glancylaw.com