Cloud computing company cited for failure to disclose loss of largest client
A federal court this week upheld allegations of securities violations against IntraLinks Holdings, inc., a virtual data room (VDR) – or cloud computing – company, for failure to disclose to investors the loss of the company’s largest client. Plaintiffs in the case are represented by Cohen Milstein Sellers & Toll PLLC.
In his opinion denying IntraLink’s motion to dismiss Wallace v. Intralinks Holdings, Inc., et al, the class action lawsuit brought by IntraLinks shareholders, Judge Thomas P. Griesa, U.S. District Court, Southern District of New York, held that given that IntraLink’s largest customer, the Federal Deposit Insurance Corporation (FDIC), told the company that it would seek an alternative VDR provider, “statements touting the customer satisfaction, renewal rate and strong market demand were misleading for failure to disclose the impending loss of its largest customer.”
The Judge further held that IntraLinks officers, CEO Andrew Damico and CFO Anthony Plesner “were aware of a significant probability that IntraLinks would lose the FDIC’s future business.”
“We are pleased with Judge Griesa's decision to uphold the IntraLinks shareholder action. The decision makes clear that Intralinks cannot escape liability for failing to inform investors of a ‘known uncertainty’ affecting the company’ growth and profitability,” said Plaintiffs’ Lead Counsel Carol V. Gilden, of Cohen Milstein Sellers & Toll PLLC, Chicago office.
Cohen Milstein serves as Lead Counsel in the consolidated class action complaint, representing Lead Plaintiff, the Plumbers and Pipefitters National Pension Fund, and the proposed class of purchasers of common stock of IntraLinks Holdings, Inc. (NYSE: IL), between February 17, 2011, and November 11, 2011. IntraLinks Holdings, Inc., provides cloud-based technology solutions that allow companies to securely provide sensitive information to multiple parties at once through virtual data rooms, secure web-based workspaces that can be used to present sensitive information to potential buyers or other entities.
The consolidated complaint, filed in June 2012, asserted both securities fraud and non-fraud claims under the federal securities laws against IntraLinks, and certain other officers and directors that were involved with the company’s secondary stock offering on April 6, 2011. Also named as Defendants are the investment banks that underwrote the secondary offering.
Wallace v. Intralinks Holdings, Inc., et al.,Civ. No. 11-8861-TPG is pending in the United States District Court for the Southern District of New York.
Carol V. Gilden, Partner
Cohen Milstein Sellers & Toll PLLC
190 South LaSalle Street, Suite 1705
Chicago, IL 60603
Telephone: (312) 357-0370