The Complaint brought forth claims for violations of the Securities Exchange Act of 1934 against Great Lakes Dredge and Dock Company (“GGLD” or the “Company”), and certain of its senior executives. The Complaint alleged that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired GGLD common stock during the Class Period.
GLDD is a holding company that engages in the business of marine construction, dredging, and commercial and industrial demolition. GLDD wanted to bolster the public perception and financial metrics of its demolition segment to demonstrate that it was an integral part of the Company’s overall business plan and that it would contribute an increasingly large percentage of the Company’s overall financial results moving forward. To that end, in 2010, GLDD announced plans to expand its demolition footprint from the Company’s historically New England-centric geographical focus into the uniquely competitive New York market. Defendants publicly touted this New York expansion as indicative of the Company’s focus on demolition as a central and complementary piece of its overall operations and growth strategy.
Specifically, the Complaint alleged, among other things, that Defendants made false and misleading statements regarding GLDD’s financial condition and operational results by prematurely recognizing revenue, and associated fictitious revenue, for at least two New York-based demolition projects. In support of these allegations, Defendants successfully delayed the accurate reporting of losses for the New York demolition projects so that more profitable projects would, on paper, absorb the cost overruns plaguing the projects in New York. Then, on March 14, 2013, the Company was forced to disclose that it had improperly recognized revenues. As a result, GLDD was required to restate results from its second and third quarters of 2012. The Company then postponed filing its 2012 annual report with the SEC, and GLDD’s president and chief operating officer, who was also the chief financial officer, resigned on the same day as GLDD’s financial restatement. Immediately after GLDD’s announcements, the Company’s stock price plummeted from a close of $8.97 per share on March 14, 2013 to $7.35 per share on March 15, 2013, a decline of 18%.
On June 7, 2013, Saxena White, P.A. was appointed Lead Counsel for the consolidated action. Plaintiff filed an Amended Complaint on August 9, 2013. After the Defendants’ Motion to Dismiss was fully brief, the Court heard oral argument on September 24, 2014. At the conclusion of the hearing, the Court verbally denied Defendants’ motion. Thereafter, on September 29, 2014, Defendants filed a motion for reconsideration, which the Court granted on October 1, 2014. On October 21, 2014, the Court issued a full order denying Defendants’ motion in which the Court concluded that the Amended Complaint’s “factual allegations, viewed holistically, support a cogent inference of scienter.”
The parties participated in a mediation on November 11, 2014. As a result of these discussions, Saxena White successfully negotiated an agreement to settle the claims for $1,955,000 on behalf of the Class.
On June 12, 2015, the Court preliminarily approved the settlement, and then on September 18, 2015, entered final judgment finding the settlement to be fair, adequate and reasonable in all respects.