Huron Consulting
Practice Area: Securities Fraud
On May 6, 2011, United States District Judge for the Northern District of Illinois Elaine E. Bucklo granted final approval of the proposed settlement reached between the plaintiffs and defendants in this case. The settlement consists of $27 million in cash plus 474,547 shares of common stock, valued at $13,292,061 as of the market's close on May 6, 2011. The approval of the settlement effectively resolves all claims asserted in the action, which charged Huron Consulting Group, Inc. and certain of its officers and directors with violations of the Securities Exchange Act of 1934.
Background
The Complaint in this case charges Huron and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Huron is a consulting company formed by former partners of Arthur Andersen, LLP which claims to help clients comply with complex regulations, resolve disputes, recover from distress, leverage technology, and stimulate growth. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that since 2006, the Company had improperly accounted for earn-out payments made in connection with four acquisitions; (2) that as a result, the Company had overstated its net income and earnings per share for the affected periods, and had understated its non-cash compensation expenses; (3) that the Company’s financial statements were not prepared in accordance with Generally Accepted Accounting Principles; (4) that the Company lacked adequate internal and financial controls; and (5) that, as a result of the foregoing, the Company’s financial statements were false and misleading at all relevant times.
On July 31, 2009, the Company shocked investors when it announced that it would restate its financial results for fiscal years 2006 through 2008 and the first three months of 2009 due to the Company’s failure to properly account for certain payments made in connection with four acquisitions. These payments were received by the sellers in connection with the sale of certain acquired businesses that were subsequently redistributed among themselves and to other select Huron employees. Under the accounting rules, these payments should have been classified as non-cash compensation expenses.
Upon the release of this news, the Company’s shares declined $30.66 per share, or 69.13 percent, to close on August 3, 2009 (the next trading day) at $13.69 per share, on unusually heavy trading volume.
On November 16, 2009, Judge Bucklo appointed Cohen Milstein Sellers & Toll PLLC as co-lead counsel in the action lawsuit. The Public School Teachers’ Pension & Retirement Fund of Chicago and the Arkansas Public Employees Retirement System serve as co-lead plaintiffs. On August 6, 2010, Judge Bucklo denied defendants’ motion to dismiss in its entirety.
On January 20, 2011, Judge Bucklo preliminarily approved the proposed settlement reached between the plaintiffs and defendants in this case. Judge Bucklo certified a settlement class consisting of purchasers of securities of Huron Consulting Group, Inc. (“Huron” or the “Company”) (NASDAQ: HURN) between April 27, 2006 and July 31, 2009, inclusive. In addition, Judge Bucklo approved the proposed plan to provide notice of the settlement to the class and scheduled a settlement fairness hearing for May 6, 2011. Under the proposed settlement, Huron has agreed to pay $27 million in cash and provide 474,547 shares of Huron common stock (valued at approximately $11 million as of November 24, 2010 based on the closing price of $23.18 per share of Huron common stock). The proposed settlement, if approved, will resolve all claims asserted in the action.
Cohen Milstein Sellers & Toll PLLC has significant experience in prosecuting investor class actions and actions involving securities fraud. The firm has offices in Washington, D.C., New York, Philadelphia, and Chicago, and is active in major litigation pending in federal and state courts throughout the nation.
The firm’s reputation for excellence has repeatedly been recognized by courts which have appointed the firm to lead positions in complex multi-district or consolidated litigation. Cohen Milstein Sellers & Toll PLLC has taken a lead role in numerous important cases on behalf of defrauded investors, and has been responsible for a number of outstanding recoveries which, in the aggregate, total in the billions of dollars.
If you have any questions about this notice or the action, or with regard to your rights, please contact either of the following:
Steven J. Toll, Esq.
Carol V. Gilden, Esq.
Cohen Milstein Sellers & Toll PLLC
1100 New York Avenue, N.W.
West Tower, Suite 500
Washington, D.C. 20005
Telephone: (888) 240-0775 or (202) 408-4600
Email: stoll@cohenmilstein.com or cgilden@cohenmilstein.com