Lawsuit Filed Against Groupon in Illinois District Court

Groupon, Inc., the online coupon company that boasts it the place to “Find Great Deals on Fun Things to Do” has been sued by a shareholder who accuses of the company of misleading its investors. The young company launched in 2008 at the height of the Great Recession when everyone was trying to stretch the dollar.

Initially, Groupon exploded and by April 2010, it was valued at 1.35 billion. Groupon became public on November 4, 2011 and offered 30 million shares at $16-18 per share to the public.

In February 2012, the shareholder, Fan Zhang, who initiated the lawsuit on April 3, 2012, purchased 3,000 Groupon shares for approximately $62,000.00. Zhang filed the lawsuit several days after Groupon revised its earnings report from the fourth quarter of 2011, the first quarter that the company was public. Groupon claimed that it had to revise its fourth quarter earnings due to poor internal controls.

The lawsuit was filed in the United States District Court for The Northern District of Illinois in Chicago, Groupon’s hometown. Zhang is seeking class certification and if successful, could be the class representative in the lawsuit. The class would consist of all shareholders who purchased shares between Nov. 4, 2011 and March 30, 2012, unless a shareholder opts out of the class.

In addition to Groupon being named as a defendant, Zhan names Groupon’s Chief Executive  Andrew Mason as a defendant along with several financial institutions such as Goldman Sachs and Morgan Stanley. Zhan alleges that the company misled its investors with material and false financial results and overstated the company’s financial success.

Undoubtedly, Groupon has skilled and experienced business dispute attorneys on their side. Chicago businesses facing a lawsuit in federal court should contact a top Naperville business firm, such as The Gierach Law Firm, who can provide the same type of effective, aggressive representation.