NEW YORK, Jan. 23, 2015 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed in the United States District Court for the Central District of California on behalf of all persons or entities that purchased the securities of Medbox, Inc. ("Medbox" or the "Company") (OTCBB:MDBX) between November 20, 2013 through December 29, 2014, inclusive (the "Class Period"), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the "Complaint").
The Complaint alleges that Defendants concealed from the investing public that: (i) Medbox was recognizing revenue before earned on certain customer contracts; (ii) Medbox lacked effective internal controls; (iii) due to its false financial reporting, Medbox was not complying with Generally Accepted Accounting Principles or SEC rules and regulations during the Class Period and, as such, was not eligible for listing on a national exchange; (iv) due to its financial misstatements, Medbox was not in compliance with its debt covenants; and (v) as a result, Medbox was not on track to achieve its financial targets during the Class Period.
According to the Complaint, on December 30, 2014, before the opening of trading, Medbox issued a press release disclosing that it would be forced to restate the past five quarters of financial reports and potentially its "financial statements for 2012 and for the first two quarters of 2013 . . . as well." The Company further disclosed that the earnings restatement had triggered a default on its debt covenants that had forced it to seek a forbearance from lenders. The release stated that the "steps [being taken were] part of the continued initiative of [Medbox's] new board of directors and new management team to implement better controls and emphasize transparency."
On this news, shares in Medbox fell almost 13%, closing at $5.58 per share on December 31, 2014, on high trading volume.
If you wish to serve as lead plaintiff, you must move the Court no later than March 23, 2015. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
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