Heck v. Orion Group Holdings, Inc. et al 4:19-cv-01337 — On April 11, 2019, investors sued Orion Group Holdings, Inc. (“Orion” or the “Company”) in United States District Court for the Southern District of Texas, Houston Division. Plaintiffs in the ORN class action allege that they acquired Orion Stock at artificially inflated prices between March 13, 2018 and March 26, 2019 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the ORN Lawsuit, please contact us today!
Summary of the Allegations
Orion (NYSE: ORN) is a self-described “leading specialty construction company.”
As such, the Company says it provides comprehensive land- and water-based construction services in the continental United States, Alaska, Canada and the Caribbean Basin.
Orion has two business divisions or “segments.” These are its heavy civil marine construction (HCMC) segment and its commercial concrete construction (CCC) segment. The former is engaged in the construction of marine transportation facilities and marine pipelines. It also dredges waterways, channels and ports. The latter is engaged in the provision of “turnkey concrete construction services across the light commercial, structural, and other associated business areas.”
Orion is incorporated in Delaware and its executive offices are located in Houston, Texas.
Summary of Facts
Orion and three of its current and/or former senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and/or withholding critical information about the Company’s business practices, operations and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about certain accounting practices and the efficacy of the Company’s internal control over financial reporting from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Orion stock to trade at artificially inflated prices during the time in question.
The truth emerged in a series of events that transpired between October 18, 2018 and March 26, 2019. First, the Company announced that it “expected a significant revenue shortfall for the third quarter 2018 due to production delays, and that its Chief Financial Officer had resigned.”
Then, on March 28, 2019, the Company disclosed that it would miss the deadline for filing its annual report with the SEC because of “extended evaluations of goodwill impairment testing and income tax adjustments, among other things.” On that same day, the Company also revealed that it “expects that a significant change in results of operations from the corresponding period for the last fiscal year will be reflected in its financial statements.”
Finally, on March 26, 2019, Orion reported a net loss exceeding $94 million for the fourth quarter of 2018 “due to certain non-cash charges, including a $69.5 million goodwill impairment charge.”
A closer look…
As alleged in the April 11 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For example, in an annual report filed with the SEC on March 13, 2018, the Company stated in relevant part: “We could suffer contract losses if we fail to accurately estimate our costs or fail to execute within our cost estimates on fixed-price, lump sum contracts.”
Then, in a quarterly report filed with the SEC on May 4, 2018, Orion stated in relevant part: “[n]o indicators of goodwill impairment were identified during the three months ended March 31, 2018.”
Finally, in a quarterly report filed with the SEC on November 2, 2018, Orion also stated in pertinent part: “During the three months ended September 30, 2018, the Company identified potential indicators of impairment to goodwill for both its marine and concrete reporting units… After evaluating all events, circumstances and factors which could affect the significant inputs used to determine fair value, the Company determined it was not more likely than not that an impairment existed at either reporting unit.”
Impact of the Alleged Fraud on Orion’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
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 June 10, 2019. 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 Orion 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:
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.