$CRNChttps://grabarlaw.com/the-latest/cerence-shareholder-investigation/
Securities fraud and shareholder governance matters have been filed on behalf of shareholders of Cerence, Inc. (NASDAQ: CRNC)
The actions arise from allegations Defendants’ misstatements and omissions concerning their scheme to pull forward revenues from future quarters by entering into a plethora of transactions that Cerence has now admitted were not in the best interests of the Company and its shareholders, and which, in fact, had a devastating impact on the Company’s financial condition and business. As Cerence has acknowledged, these deleterious deals were personally ordered and approved by the Company’s two most senior officers – its former CEO Dhawan and former CFO Gallenberger. Dhawan and Gallenberger entered into these deals solely to allow Defendants to create the materially false impression that Cerence was meeting its aggressive revenue guidance through transactions that actually benefitted the Company, as well as to maintain their story that Cerence was a successful tech spin-off. In reality, and unbeknownst to shareholders, these deals did the exact opposite: rather than establish Cerence as a strong, successful company with a growing revenue stream, they harmed the company by cannibalizing its future business. Significantly, by artificially inflating the Company’s short-term revenue, these deals also enabled Defendants to realize enormous amounts of performance-based executive compensation throughout the Class Period that was directly tied to Cerence’s purported revenue growth, and to sell more than $25 million worth of their Cerence holdings at prices inflated by the fraud. Once Defendants’ scheme began to unravel, Dhawan and Gallenberger suddenly and unexpectedly “resigned,” the Company’s new CEO soon was forced to acknowledge Defendants’ machinations, analysts excoriated management for its lack of credibility, and Cerence’s stock price collapsed, losing more than 58% of its value in just two and a half months as a result of the revelations of the fraud.
Current Cerence shareholders who have held Cerence stock since prior to November, 16, 2020, can seek corporate reforms, the return of funds spent defending litigation back to the company, and a court approved incentive award at no cost to them whatsoever.
If you would like to learn more about this matter, you are encouraged to contact us at jgrabar@grabarlaw.com, or call 267-507-6085.