SFX Entertainment faces new Class Action Lawsuit from Abbey Spanier, LLP
Facing another hurdle after a plethora of bad breaks, SFX Entertainment is now being sued by all investors who purchased or otherwise acquired common stock. Abbey Spanier, LLP announced the class action suit against the industry titan, citing false statements made by SFX Entertainment.
According to sources, the complaint alleges that the company mislead shareholders in connection with the acquisition by the company’s largest shareholder, CEO Robert F.X. Sillerman, and states that he knew he didn’t have the financing to complete the transaction. In addition, the lawsuit alleges that SIllerman maintained a false front to try and lure third party investors in before the truth of the company’s failures came to light. The false statements were an attempt to inflate the stock price of SFX Entertainment, which according to the lawsuit, would not have remained as high if the claims weren’t made.
SFX’s stock has taken a huge hit over the summer, as one analyst firm set the price at $1. The company terminated the buyout offer from its CEO in August and also saw stock plummet down to $1.94 a share, which represented a loss of over 25% of the share’s value.