New York, New York–(Newsfile Corp. – March 16, 2020) – Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Fluor Corporation (NYSE: FLR) (“Fluor” or the “Company”) of the April 28, 2020 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
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If you invested in Fluor stock or options between November 2, 2017 and February 14, 2020 and would like to discuss your legal rights, click here: www.faruqilaw.com/FLR. There is no cost or obligation to you.
You can also contact us by calling Richard Gonnello toll free at 877-247-4292 or at 212-983-9330 or by sending an e-mail to [email protected].
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Attn: Richard Gonnello, Esq.
Telephone: (877) 247-4292 or (212) 983-9330
The lawsuit has been filed in the U.S. District Court for the Northern District of Texas (Dallas Division) on behalf of all those who purchased Fluor common stock between November 2, 2017 and February 14, 2020 (the “Class Period”). The case, Union Asset Management Holding AG v. Fluor Corporation et al., No. 20-cv-00518 was filed on February 28, 2020, and has been assigned to Judge Jane J. Boyle.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by inflating Fluor’s revenue and earnings and improperly recognizing revenue on 16 separate projects. Once awarded a contract to perform work on a project, Fluor would routinely submit “change forms” to its clients in which Fluor would request additional funds to cover the Company’s cost overruns that resulted from “unforeseen circumstances,” funds which the client was not contractually obligated to pay. When Fluor determined, through its own assessment, that it was “likely” that the client would accept their change order, Fluor would book the additional revenue. This was contrary to Defendants’ assurances to investors that the Company would only recognize revenue from its submission of these change orders if it determined that “recovery of incurred costs is probable and the amounts can be reliably estimated.”
Defendants had also been secretly utilizing change orders, among other tactics, to improperly inflate the Company’s revenue and earnings by recognizing additional revenue on its contracts despite having no reasonable basis to do so.
Specifically, on May 2, 2019, before the markets had opened, Fluor disclosed to investors that its Chief Executive Officer (“CEO”) David T. Seaton had left the Company, effective immediately, and would be replaced by interim CEO and Chief Legal Officer Carlos M. Hernandez. In addition, Fluor significantly reduced its earnings guidance, and disclosed that the Company was taking over $100 million in charges.
On this news, Fluor’s stock fell from a closing price of $39.15 per share on May 1, 2019 to $29.72 on May 2, 2019-a $9.43 or 24.09% drop.
Then, on August 1, 2019, after the markets had closed, the Company revealed that it would be taking a $714 million pre-tax charge on approximately 16 different projects, including incurring a $233 million charge on a project in which Fluor serves as a subcontractor for British Aerospace Engineering Systems, Inc. in its work on the United States Army Radford Army Ammunition Plant (the “Radford Project”).
On this news, Fluor’s stock fell from a closing price of $30.91 per share on August 1, 2019 to $22.67 on August 2, 2019-a $8.24 or 26.70% drop.
Finally, on February 18, 2020, before the markets opened, the Company revealed that the SEC was investigating Fluor’s past accounting and financial reporting, and had requested additional information related to its 2Q 2019 Projects. In addition, Fluor announced that the Company had also commenced its own internal investigation into the 2Q 2019 Projects, “focusing initially on the Radford [Project].” As a result of these investigations, Fluor announced that it would not be able to complete and file its Form 10-K on time.
On this news, Fluor’s stock fell from a closing price of $19.54 per share on February 14, 2020 to $14.79 on February 18, 2020-a $4.75 or 24.31% drop.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Fluor’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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