SAN FRANCISCO, Oct. 7, 2014 (GLOBE NEWSWIRE) -- Hagens Berman Sobol Shapiro LLP, a top-tier investor-rights law firm has launched an investigation in response to potential claims on behalf of purchasers of the American Depositary Receipts ("ADRs") of Tesco PLC ("Tesco" or the "Company") concerning possible violations of federal securities laws and to determine who has been damaged and may have claims.
Any purchasers of Tesco ADRs should contact Hagens Berman Partner Reed Kathrein, who is leading the firm's investigation, by calling (510) 725-3000, emailing TSCDY@hbsslaw.com or visiting http://hb-securities.com/investigations/TSCDY. Currently it appears the investors who purchased on or after August 29, 2014 may have damages but we expect that because of the nature of the error it is likely that revenues have been overstated for a couple of years or more.
Our investigation is related to Tesco's September 22, 2014, disclosure that the Company is investigating the overstatement of its 2015 profit forecast by approximately $408.8 million. According to Tesco, the overstatement was the result of an accounting error related to revenue that was booked early and by delayed recognition of costs. The Company's CEO told reporters that the error was discovered by a "commercial manager", who informed the firm's legal counsel when he discovered it during preparations for the forthcoming first half results. Tesco's interim results have now been pushed back from Oct. 1 to Oct. 23. At least four senior executives have been suspended pending the conclusion of the Company's investigation.
Investors, analysts and some former employees are questioning whether an aggressive culture influenced the way the company handled its finances - especially when trading slowed over the last few quarters. Cantor analyst Mike Dennis, last year questioned how the company could be maintaining its trading margin at a time of falling sales and rising costs, and noted that staff had been incentivized via share schemes to maintain the measure. The matter is also being investigated by Britain's Financial Conduct Authority.
Following these disclosures, Tesco ADRs dropped as much as 14%, or $1.68 per share, to $9.61 on September 22, 2014. Tesco ADR's have since slid to almost $8 per share.
"When a sophisticated investor such as Warren Buffet admits he was taken, you know that it's not your failure to accurately analyze the stock," said Mr. Kathrein. "The supposed accounting error Tesco admits to is serious and indicative of a real problem within management, be it gross negligence or fraud."
Whistleblowers: Persons with non-public information regarding Tesco should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. For more information, call Reed Kathrein at (510) 725-3000 or email TSCDY@hbsslaw.com.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes can be found at www.hbsslaw.com. Read the firm's Securities Newsletter at http://www.hb-securities.com/newsletter.
For the latest news from Hagens Berman, visit http://www.hbsslaw.com/newsroom or follow us on Twitter at @hagensberman.