Shareholder Class Action Alleging CURO Group Holdings, Corp. (CURO) Made Materially False and Misleading Statements Survives Motion to Dismiss
Investors filed a class action complaint against CURO Group Holdings, Corp. (CURO) for alleged violations of the Securities Exchange Act of 1934. According to the class action complaint, between July 31, 2018 and October 24, 2018, CURO consistently touted the ongoing success of transitioning its Canadian inventory products from Single-Pay Loans to Open-End Loans and reaffirmed its 2018 full-year financial guidance. Despite positive assurances regarding the transition, on October 24, 2018, CURO shocked investors with disappointing results for the Company’s third quarter, including Canadian revenue that had decreased by $4.4 million, provision for losses that had increased by $8.7 million, and an adjusted EBITDA that decreased by $15.36 million. As a result, CURO revised its 2018 full-year guidance to include adjusted net income in the range of $88-$91 million compared to the previous range of $110-$116 million and an adjusted EBITDA in the range of $215-$218 million compared to its previous range of $245-$255 million. On this news, CURO’s stock price plummeted $7.69, or almost 34%, to close at $15.18 per share. On December 3, 2019, U.S. District Court Judge John W. Lungstrum denied CURO’s motion to dismiss plaintiffs’ claims, paving the way for litigation to proceed.
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