January 25, 2016 – Kaplan Fox & Kilsheimer LLP (www.kaplanfox.com) has been investigating Cnova NV ("Cnova” or the "Company") (Nasdaq: CNV) for potential violations of the federal securities laws. Investors who purchased Cnova securities may be affected.
On November 19, 2014, Cnova sold 26.8 million shares at $7 per share in its initial public offering (the “IPO”).
On December 18, 2015, Cnova disclosed that it had “engaged legal advisors and external forensic accountants to perform a review of issues in connection with employee misconduct related to inventory management,” and that “[t]he investigation will also assess any accounting and financial statement impact of the conduct under review.” On December 21, 2015, the first trading day following the news, Cnova’s stock price declined by nearly 18% to close at $2.42 per share, more than 65% less than the IPO price of $7 per share.
On January 12, 2016, Cnova provided an update and disclosed, among other things, that investigations performed so far in connection with inventory management at its Brazilian subsidiary distribution centers uncovered a potential overstatement of the Company’s net sales by approximately €30 million on a cumulative basis as of December 31, 2015.
A class action lawsuit has been filed against Cnova, certain of its officers and directors, and the underwriters of Cnova’s IPO for violations of the federal securities laws. The case is pending in the United States District Court for the Southern District of New York on behalf of all investors who purchased or otherwise acquired Cnova securities between November 19, 2014 and December 18, 2015. The class action alleges that defendants failed to disclose that (1) Cnova’s net sales were overstated, (2) Cnova failed to properly write-off the value of certain returned items, (3) there was a material discrepancy in accounts receivable related to the damaged/returned items, (4) the Company’s EBIT was overstated, (5) Cnova lacked adequate internal controls, and (6) Cnova’s financial statements were materially false and misleading.
If you purchased Cnova shares and would like to discuss our investigation, please contact us by e-mailing
or by calling 800-290-1952.
Attorneys: Laurence D. King, Pamela A. Mayer