Faruqi & Faruqi, LLP’s national practice focuses on complex civil litigation. The firm practices in the areas of Securities, Merger & Transactional, Shareholder Derivative, Antitrust, Consumer Class Action, and Wage & Hour litigation.
Wednesday, January 13, 2016
Faruqi & Faruqi Investigation: Endurance International Group Holdings Inc.
The investigation focuses on whether the Company’s Board of Directors and its officers committed mismanagement and breached their fiduciary duties. On April 28, 2015, research firm Gotham City Research LLC (“Gotham”) published a report entitled “Endurance International Group: A Web of Deceit.” The report alleges, among other things, that over 40% of the Company’s reported profits are suspect, the Company engaged in related party transactions for the purpose of overstating earnings, organic growth is overstated, the Company hosts terrorist-related websites and a high percentage of malware/spam-related accounts, and the Company’s churn rate is high as a result of service outages, poor customer support and slow loading speeds.
As a result, on December 17, 2015, the Company announced that it had received a subpoena dated December 10, 2015 from the Boston Regional Office of the Securities and Exchange Commission (the “SEC”) requiring the production of certain documents, including, among other things, documents related to Endurance’s financial reporting, including operating and non-GAAP metrics, refund, sales and marketing practices and transactions with related parties. The Company further stated that it can make no assurance as to the time or resources that will need to be devoted to this investigation or its final outcome, or the impact, if any, of this investigation or any proceedings on Endurance’s business, financial condition, results of operations and cash flows.