Law Offices of Howard G. Smith is investigating potential claims against VeriFone Systems on possible violations to federal securities. Focusing on allegations that certain statements issued by VeriFone between December 14, 2011 and February 19, 2013 were false and misleading regarding the Company’s operations and financial performance, the investigation is related to allegations Verifone failed to execute on its plan to move to a more subscriptions-based service model, past acquisitions had masked what was happening at the Company and Verifone accounting recognition having been overly aggressive.
On February 20, 2013, VeriFone announced its preliminary financial results for the first fiscal quarter ended January 31, 2013. The Company announced that it expected first quarter adjusted earnings of $0.47 to $0.57 per share on revenue of $424 million, well below analysts’ profit forecast of $0.73 per share on revenue of $492 million. The Company also announced a new revenue recognition policy which prevented it from recognizing revenues that quarter from distributors in the Middle East and Africa. The next day, February 21, 2013, VeriFone shares fell $13.65 from the previous day’s close of $31.89 per share, to a closing price of $18.24 per share, on extremely heavy trading volume.Details