Plymouth County (Mass.) Retirement Association was awarded an $8.55 million settlement in a securities class-action lawsuit against software company Model N Inc.
The plaintiffs in the suit alleged that the offering materials for an initial public offering made inaccurate statements and omitted adverse, material facts about Model N's true financial condition that the company was required to disclose. Specifically, the plaintiffs alleged that the offering materials failed to disclose that, at the time of the IPO, Model N was experiencing sales execution challenges — the inability to close and book sales, said a news release from the $830 million pension fund.
These challenges reversed the booking and revenue trends reported in Model N's offering materials, causing future bookings and revenue to decline. At the time the action was filed in September 2014, Model N's stock was trading as low as $9.50 per share — a decline of 38% from the IPO price.
Model N went public on March 20, 2014, and sold 7.751 million shares of common stock to the public at $15.50 per share, raising more than $108 million in gross proceeds for the company.
The settlement is subject to the approval of the Superior Court of California for the County of San Mateo in Redwood City, Calif.
Model N spokeswoman Diandra Weldon could not be reached for comment by press time.