On May 10, 2018, investors sued InnerWorkings, Inc. (“InnerWorkings” or the “Company”) in United States District Court, Central District of California. Plaintiffs in the federal securities class action allege that they acquired InnerWorkings stock at artificially inflated prices between August 11, 2015, and May 7, 2018 (the “Class Period”).  They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s everything you need to know about the InnerWorkings class action lawsuit (INWK class action lawsuit):

Summary of the Allegations

Company Background

The Company (NASDAQ: INWK) is the self-proclaimed “leading global marketing execution firm serving Fortune 1000 brands across a wide range of industries.” As such, it uses   its proprietary technology and expertise to facilitate “the production of branded materials and retail experiences across geographies and formats.”

In all, InnerWorkings has 2,000 employees to serve its clients and customers in the United States and overseas. Specifically, it serves customers and clients in retail, financial services, hospitality, and consumer packaged goods, not-for-profits, healthcare, food & beverage, broadcasting & cable, automotive, and transportation.

Summary of Facts

InnerWorkings and four of its current and former senior officers/directors now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.

Specifically, they are accused of omitting truthful information about the accuracy of its financial statements for certain years from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused InnerWorkings stock to trade at artificially inflated prices during the time in question.

The truth came out when the Company issued a press release on May 7, 2018. In it, InnerWorkings announced that it was postponing the release of its financial results for the first quarter of 2018. The Company also revealed that several of its “historical financial statements contained errors which required restatement.”

A closer look…

As alleged in the May 10 complaint, the Company repeatedly made misleading public statements during the Class Period.

Specifically, the Complaint cites approximately 10 occasions on which the Company filed forms reporting its financial results with the SEC. In each case, the forms included “signed SOX certifications… attesting to the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting and the disclosure of all fraud.”

What the Company failed to disclose, however, was that its financial statements for the 2015, 2016 and 2017 fiscal years “as well as interim periods contained errors that required restating,” and that this rendered its financial statements “materially false and misleading at all relevant times.”

In its May 7 press release, InnerWorkings finally acknowledged the errors and explained that they “relate primarily to recording a portion of costs of goods sold in the wrong period, and have no material impact on InnerWorkings’ cash flow, revenue or liquidity.”

Impact of the Alleged Fraud on InnerWorkings’ Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is July 9, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in InnerWorkings common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.