Lead Plaintiff Deadline: 04/28/2020
SUMMARY OF CASE:
A securities class action has been filed against Fluor Corporation (FLR) on behalf of investors in Fluor common stock between November 2, 2017 through February 14, 2020. This case has been filed in the USDC – Northern District of Texas.
The complaint alleges that, throughout the Class Period, Defendants inflated Fluor’s revenue and earnings by improperly recognizing revenue on 16 separate projects (“2Q 2019 Projects”). Once awarded a contract to perform work on a construction project, the Company would routinely submit “change orders” to its clients to request additional funds, which the client was not contractually obligated to pay, to cover “unforeseen circumstances.” Defendants repeatedly made false and misleading statements to investors regarding Fluor’s revenue recognition practices with respect to its submission of these change orders. As a result of Defendants’ misrepresentations, shares of Fluor’s common stock traded at artificially inflated prices during the Class Period.
The truth emerged through a series of disclosures beginning on May 2, 2019, when Fluor announced the immediate departure of its CEO, David T. Seaton, significantly reduced its earnings guidance, and disclosed that Fluor was taking charges of over $100 million on various projects due, in part, to Fluor’s “revenue recognition” practices.
Then, on August 1, 2019, Defendants revealed that Fluor would be taking a $714 million charge on the 2Q 2019 Projects, including incurring a $233 million charge on Fluor’s project at the Radford Army Ammunition Plant (the “Radford Project”).
Finally, on February 18, 2020, Defendants revealed that the U.S. Securities and Exchange Commission was investigating Fluor’s revenue recognition practices related to the 2Q 2019 Projects and had requested information related to those projects. In addition, Defendants announced that Fluor had also commenced an internal investigation into the 2Q 2019 Projects, “focusing initially on the Radford [Project].” As a result of these disclosures, the price of Fluor common stock declined precipitously.