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Clarivate Plc

Class Action
  • Active
Investigation
12/27/2021
Initial Lawsuit
01/24/2022
Lawsuit Progression
05/18/2022

Investigation

Did Clarivate mislead investors? The company asserted the effectiveness of its controls & procedures before revealing defective disclosure controls & procedures resulting in a material weakness in its internal control over financial reporting.

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed. We will update this post as it unfolds.

  • Investigation Date
    12/27/2021
  • Hypothetical Affected Period
    February 26, 2021 to December 27, 2021
  • Hypothetical Transgression
    Securities Violation
Main Event

Non-Reliance on Previous Financial Statements

12/27/2021

SEC Filing

Clarivate concludes that some of its financial statements should no longer be relied upon because of an error. “In the affected financial statements, certain awards made by CPA Global under its equity plan were incorrectly included as part of the acquisition accounting for the CPA Global Transaction. For the majority of these awards, the Company concluded that expenses should have been recognized as stock-based compensation charges over the vesting period from October 1, 2020 to October 1, 2021, with only a portion of the liability recorded as part of acquisition accounting. These expenses, of up to $185 million, will be recorded primarily over the periods ending December 31, 2020, March 31, 2021, June 30, 2021, and September 30, 2021. . .“

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close Previous close Price variation Percentage variation
$24.58 $24.74 $-0.16 -0.65%
See more on Factual Timeline

Initial Lawsuit

A Clarivate Plc (CLVT) shareholder filed a federal securities class action on behalf of a class consisting of all persons and entities (other than defendants) that purchased or otherwise acquired Clarivate securities between February 26, 2021 and December 27, 2021, both dates inclusive.

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) Clarivate maintained defective disclosure controls and procedures as a result of a material weakness in its internal control over financial reporting; (ii) the foregoing material weakness was not limited to how the Company accounted for warrants;
(iii) as a result, Clarivate failed to properly account for an equity plan included in its acquisition of CPA Global;
(iv) accordingly, the company was reasonably likely to restate one or more of its previously issued financial statements following its acquisition of CPA Global; and
(v) as a result, the company’s public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    Clarivate Plc
  • Chief Executive Officer
    Jerre Stead
  • Chief Financial Officer
    Richard Hanks

Lawsuit progression

  • Docket Number
    1:22-cv-00394
  • Court
    New York Eastern District Court

Lead Counsel

05/18/2022

The court issued an order appointing the lead plaintiff and lead counsel.

Factual Timeline

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