NEW YORK, Jan. 29, 2015 /PRNewswire/ -- Pomerantz LLP
announces that a class action lawsuit has been filed against
Medbox, Inc. ("Medbox" or the "Company")(OTC: MDBX) and certain of
its officers. The class action, filed in United States
District Court, Central District of California, and docketed
under 15-cv-00683, is on behalf of a class consisting of all
persons or entities who purchased Medbox securities between
November 20, 2013 and December 29, 2014, inclusive (the "Class
Period"). This class action seeks to recover damages against
Defendants for alleged violations of the federal securities laws
under the Securities Exchange Act of 1934 (the "Exchange
Act").
If you are a shareholder who purchased Medbox securities during
the Class Period, you have until March 22,
2015 to ask the Court to appoint you as Lead Plaintiff for
the class. A copy of the Complaint can be obtained at
www.pomerantzlaw.com. To discuss this action, contact
Robert S. Willoughby at
rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll
free, x237. Those who inquire by e-mail are encouraged to include
their mailing address, telephone number, and number of shares
purchased.
Medbox, Inc., through its subsidiaries, provides patented
biometrically controlled medicine storage and dispensing systems to
the medical and retail industries.
The Complaint alleges that during the Class Period, Defendants
issued materially false and misleading statements regarding the
Company's financial results for the fiscal year ended December 31, 2013 and each of the interim
financial periods ended September 30,
2013, December 31, 2013,
March 30, 2014, June 30, 2014 and September 30, 2014. Specifically, Defendants
overstated Medbox's revenues by recognizing revenue on customer
contracts before it had been earned. As a result of these false
statements, Medbox's stock traded at artificially inflated prices
during the Class Period, reaching an intraday Class Period high of
$93.50 on January 8, 2014.
On or about April 10, 2014,
Defendant P. Vincent Mehdizadeh
resigned as COO and as a director of Medbox, but was appointed as
"Senior Strategist and Founder" of Medbox. Thereafter, the
price of Medbox stock declined, dropping from a closing price of
$17.52 per share on May 16, 2014 to close down at $16.11 per share on May
19, 2014, following the Friday, May
16, 2014 issuance of a report by the SEC warning of
"possible scams involving marijuana-related investments" and
quoting Elisha Frank, co-chair of
the SEC Enforcement Division's Microcap Fraud Task Force as stating
"[w]henever we see incomplete or misleading disclosures, we act
quickly to protect investors."
On or about October 17, 2014, the
Company disclosed that Defendant Mehdizadeh had resigned as an
officer of Medbox but that he would continue to serve the Company
as a consultant with the title of Founder and Senior Advisor.
Then, on or about October 21,
2014, the Company disclosed that Medbox's Chief Financial
Officer ("CFO") Thomas Iwanski
("Iwanski") – who was just hired in that capacity by the Company in
February 2014 - was being replaced by
Defendant Douglas Mitchell
("Mitchell"), though Iwanski too would stay on as a consultant.
Thereafter, on October 31, 2014, the
Company disclosed that it had appointed a special board committee
to investigate a letter from a former Company employee to the SEC
"alleging wrongdoing by a former officer of the Company who [was] a
consultant to the Company" and that "a federal grand jury document
subpoena [had been] served in August
2014 on the Company's accountants by the U.S. Department of
Justice…."
On November 3, 2014, a press
release was issued stating it was released by Medbox entitled
"Medbox Comments on Recent 8-K Filing" which claimed that the
former employee who sent the letter to the SEC had done so in
retribution for Medbox's refusal to pay him a cash settlement,
quoting Defendant Mehdizadeh, and further stating that "[c]urrent
management commented that the Company ha[d] not found any
indications that the subject matter contained in the [former
employee's] letter [was] true concerning the conduct of prior
officers of the company."
Meanwhile, shares of Medbox fell $1.50 per share from their October 31, 2014 closing price of $13.95 per share, or 10.8%, to close at
$12.45 on November 3, 2014. Shares fell another
$2.75 per share on November 5, 2014 as the financial media reported
on the ensuing SEC investigation and the market absorbed the full
import of the disclosures.
Then, on November 7, 2014, Medbox
filed a Current Report on Form 8-K with the SEC stating the
November 3, 2014 press release, which
quoted Defendant Mehdizadeh, had not been "authorized by
Medbox."
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 of Medbox fell $0.81 per share, or approximately 12.67%, to
close at $5.58 per share on
December 31, 2014.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and San
Diego, is acknowledged as one of the premier firms in the
areas of corporate, securities, and antitrust class litigation.
Founded by the late Abraham L.
Pomerantz, known as the dean of the class action bar, the
Pomerantz Firm pioneered the field of securities class actions.
Today, more than 70 years later, the Pomerantz Firm continues in
the tradition he established, fighting for the rights of the
victims of securities fraud, breaches of fiduciary duty, and
corporate misconduct. The Firm has recovered numerous
multimillion-dollar damages awards on behalf of class members. See
www.pomerantzlaw.com.
CONTACT:
Robert S.
Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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SOURCE Pomerantz LLP