The law firm of Bronstein, Gewirtz & Grossman, LLC and a second firm, Kirby McInerney LLP, announced that class action lawsuits have been filed in the U.S. District Court for the District of New Jersey against Crown Castle International (CCI). The firms notified investors they are investigating potential claims on behalf of purchasers of Crown Castle stock. The investigation concerns whether Crown Castle and certain of its officers and/or directors have violated federal securities laws. The deadline for joining the class action is April 27, 2020.
Crown issued the following statement on the situation to Inside Towers: “Last week, Crown Castle announced that we will issue restatements of previously-filed financial information. It is common practice for lawsuits to be filed against companies when this occurs. Crown Castle believes the claims are without merit and we intend to vigorously defend the company.”
The complaints allege that throughout the Class Period, “Defendants made materially false and/or misleading statements and/or failed to disclose that: (1) Crown Castle’s internal control over financial reporting and disclosures controls and procedures were ineffective and materially weak; (2) Crown Castle’s financial accounting and reporting was not in accordance with GAAP; (3) Crown Castle’s net income, adjusted EBITDA, and adjusted funds from operations were inflated; (4) Crown Castle would need to restate its financial statements for the years ended December 31, 2018 and 2017, and unaudited financial information for the quarterly and year-to-date periods in the year ended December 31, 2018 and for the first three quarters in the year ended December 31, 2019; and (5) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.”
On February 26, 2020, Crown disclosed that its historical accounting practice with respect to recognizing servicing revenues from its tower installation services “was not acceptable under GAAP.” The company advised investors, according to the firms filing the suit, that it would restate its financial statements for the years ended December 31, 2018 and 2017, and for the first three quarters in the year ended December 31, 2019. Crown Castle’s share price fell $14.38, or 8.8 percent, to close at $148.31 per share on February 27, 2020, the first trading day following the announcement. Crown closed yesterday at $158.13.
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