Angie's List hit with shareholder suit

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Angie’s List’s CEO William Oesterle and four other top executives made a series of false or misleading statements about the company’s prospects that inflated its stock price earlier this year as they sold $13 million of their own shares, a lawsuit seeking class-action status alleges.

Bringing the case on behalf of shareholders Eva and Harold Baron is Robbins Geller Rudman & Dowd LLP, a national securities litigation firm that led $7.3 billion in settlements for former investors of scandal-plagued energy giant Enron Corp.

Robbins Geller said it filed the suit on Monday in U.S. District Court for the Southern District of Indiana.  

The suit alleges multiple violations of federal securities regulations and seeks unspecified financial damages on behalf of common shareholders between Feb. 14 and Oct. 23 of this year.

The 27-page complaint said Oesterle was the biggest benefactor, selling 486,400 shares for a net $10.4 million.  

It wasn’t immediately clear if the stock sales were required per terms of the executives' stock option plans, however.

Also listed as defendants are co-founder and chief marketing officer Angela Hicks Bowman; controller Charles Hundt; former chief financial officer Robert R. Millard; and former chief technology officer Manu Thapar.

Broadly, the suit recounts a litany of positive statements made by Oesterle and other executives during earnings calls and in presentations to analysts and shareholders.  

In fact, the Indianapolis-based firm that provides reviews of service providers (such as plumbers and roofers) by its members exceeded analysts' expectations during much of 2013.

“Based on the positive mantra” of executives, the suit alleges, Angie’s stock price hit a high of $28 last July. At the same time, executives were selling shares, “with the price of the company’s stock artificially inflated based on their misstatements.”

A key issue in the complaint is that the company was increasingly relying on providing free memberships in order to “artificially” boost its subscriber figure.

The suit cites an interview that The Wall Street Journal conducted with Oesterle that indicated  Angie’s was cutting the subscription cost for new members in New York, Chicago, San Francisco, Washington, D.C., and Indianapolis to $10 from $40.

The market didn’t respond well to the news, with Angie’s shares falling more than 17 percent on Oct. 3.   

The stock would fall from $28 earlier in the summer to a low of around $12 this fall. In trading Tuesday morning, shares had dropped 2.5 percent to $14.27.

The company went on to report a third quarter loss of $13.5 million, or 23 cents a share, which was worse than the 20-cents-per-share loss that analysts were led to expect “based on defendants’ bullish” statements, the suit alleges.

Angie’s List spokeswoman Cheryl Reed said Tuesday that the company would have no comment about the lawsuit.

Robbins Geller’s local counsel is Parr Richey Obremskey Frandsen & Patterson LLP.


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  1. I think the cops are doing a great job locking up criminals. The Murder rates in the inner cities are skyrocketing and you think that too any people are being incarcerated. Maybe we need to lock up more of them. We have the ACLU, BLM, NAACP, Civil right Division of the DOJ, the innocent Project etc. We have court system with an appeal process that can go on for years, with attorneys supplied by the government. I'm confused as to how that translates into the idea that the defendants are not being represented properly. Maybe the attorneys need to do more Pro-Bono work

  2. We do not have 10% of our population (which would mean about 32 million) incarcerated. It's closer to 2%.

  3. If a class action suit or other manner of retribution is possible, count me in. I have email and voicemail from the man. He colluded with opposing counsel, I am certain. My case was damaged so severely it nearly lost me everything and I am still paying dearly.

  4. There's probably a lot of blame that can be cast around for Indiana Tech's abysmal bar passage rate this last February. The folks who decided that Indiana, a state with roughly 16,000 to 18,000 attorneys, needs a fifth law school need to question the motives that drove their support of this project. Others, who have been "strong supporters" of the law school, should likewise ask themselves why they believe this institution should be supported. Is it because it fills some real need in the state? Or is it, instead, nothing more than a resume builder for those who teach there part-time? And others who make excuses for the students' poor performance, especially those who offer nothing more than conspiracy theories to back up their claims--who are they helping? What evidence do they have to support their posturing? Ultimately, though, like most everything in life, whether one succeeds or fails is entirely within one's own hands. At least one student from Indiana Tech proved this when he/she took and passed the February bar. A second Indiana Tech student proved this when they took the bar in another state and passed. As for the remaining 9 who took the bar and didn't pass (apparently, one of the students successfully appealed his/her original score), it's now up to them (and nobody else) to ensure that they pass on their second attempt. These folks should feel no shame; many currently successful practicing attorneys failed the bar exam on their first try. These same attorneys picked themselves up, dusted themselves off, and got back to the rigorous study needed to ensure they would pass on their second go 'round. This is what the Indiana Tech students who didn't pass the first time need to do. Of course, none of this answers such questions as whether Indiana Tech should be accredited by the ABA, whether the school should keep its doors open, or, most importantly, whether it should have even opened its doors in the first place. Those who promoted the idea of a fifth law school in Indiana need to do a lot of soul-searching regarding their decisions. These same people should never be allowed, again, to have a say about the future of legal education in this state or anywhere else. Indiana already has four law schools. That's probably one more than it really needs. But it's more than enough.

  5. This man Steve Hubbard goes on any online post or forum he can find and tries to push his company. He said court reporters would be obsolete a few years ago, yet here we are. How does he have time to search out every single post about court reporters and even spy in private court reporting forums if his company is so successful???? Dude, get a life. And back to what this post was about, I agree that some national firms cause a huge problem.