Lawyers Allege Possible Breaches of Fiduciary Duty By NetflixBy: Chris Crum - January 16, 2012
Legal claims against the officers and Board of Directors of Netflix, by Former United States Securities and Exchange Commission attorney Willie Briscoe, founder of The Briscoe Law Firm, PLLC, and the securities litigation firm of Powers Taylor, LLP.
The investigation is regarding claims related to potential securities violations between December 20, 2010 and October 24, 2011 (the “Class Period”). Powers Taylor says in a press release:
In a recently filed federal class action complaint, Netflix and certain of its officers and directors were charged with violating provisions of the Securities Exchange Act of 1934. Specifically, the complaint alleges that defendants knew but concealed the following facts from the investing public during the Class Period: (a) Netflix had short-term contracts with content providers and defendants were aware that the company faced the choice of renegotiating the contracts in 2011 at much higher rates or not renewing them at all; (b) content providers were already demanding much higher license fees, which would dramatically alter Netflix’s business; (c) defendants recognized that Netflix’s pricing would have to dramatically increase to maintain profit margins given the streaming content costs they knew the Company would soon be incurring; and (d) Netflix was not on track to achieve the earnings forecasts made by and for the company for 2011.
“Because of the severity of the accusations lodged against certain of Netflix’s officers and directors, we are concerned about the possible damage to the company and its shareholders, and the firms have commenced an investigation to uncover possible breaches of fiduciary duties and other violations of state law by the officers and directors,” said Briscoe.
Powers Taylor is recommending “affected” investors contact them to join the action at no cost.