This is a securities class action on behalf of investors who purchased securities of OneSpan, Inc. (“OneSpan” or the “Company”) from May 9, 2018, to August 11, 2020 (the “Class Period”), seeking to recover damages caused by OneSpan and certain of its senior officers’ violations of the Securities Exchange Act of 1934.
Defendant OneSpan is headquartered in Chicago, Illinois. It designs, develops, and markets cloud-based, digital solutions for identity, security, and business productivity worldwide. OneSpan offers its solutions through software service contracts with its customers. At all relevant times to the suit, Defendant Scott Clements was Onespan’s Chief Operating Officer, and Defendant Mark S. Hoyt was OneSpan’s Chief Financial Officer.
The case arises from Defendants’ false and misleading statements with respect to revenue derived from its software service contracts.
Specifically, Defendants misled investors by overstating OneSpan’s revenue derived from customer contracts for software licenses.
The truth began to emerge on August 4, 2020, when OneSpan postponed its second quarter (Q2) 2020 earnings release and conference call by one (1) week, blaming the delay on prior period revenue recognition problems relating to certain software license contracts. OneSpan and senior management explained “[t]he net contract assets that originated from a portion of these assets in prior periods were not properly accounted for in subsequent periods, which caused overstatements of revenue.”
As a result of these disclosures, the price of OneSpan’s common shares declined by 1.4% to close at $32.50 per share.
Then on Aug. 11, 2020, OneSpan (1) announced it would not timely file its Q2 2020 financial statements on Form 10Q with the SEC, (2) revealed that revenue recognition problems stretched from Q1 2018 through Q1 2019, (3) reported that same quarter year-over-year revenues had declined, and (4) withdrew its full year 2020 earnings guidance.
As a result of these disclosures, the price of OneSpan’s common shares declined further by nearly 40% (closing at $18.84 per share) on unusually high trading volume, thereby damaging investors.
Hagens Berman is continuing its investigation and will be filing an amended complaint. If you have or know of persons who are willing to help and have non-public information regarding this suit against OneSpan can call our attorneys at 888-0916-0895 or email [email protected].