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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. All the lawyers involved in this don't add up to a hill of beans; mostly yes-men punching their tickets for future advancement. REMF types. Window dressing. Who in this mess was a real hero? the whistleblower that let the public know about the torture, whom the US sent to Jail. John Kyriakou. http://www.nytimes.com/2013/01/26/us/ex-officer-for-cia-is-sentenced-in-leak-case.html?_r=0 Now, considering that Torture is Illegal, considering that during Vietnam a soldier was court-martialed and imprisoned for waterboarding, why has the whistleblower gone to jail but none of the torturers have been held to account? It's amazing that Uncle Sam's sunk lower than Vietnam. But that's where we're at. An even more unjust and pointless war conducted in an even more bogus manner. this from npr: "On Jan. 21, 1968, The Washington Post ran a front-page photo of a U.S. soldier supervising the waterboarding of a captured North Vietnamese soldier. The caption said the technique induced "a flooding sense of suffocation and drowning, meant to make him talk." The picture led to an Army investigation and, two months later, the court martial of the soldier." Today, the US itself has become lawless.

  2. "Brain Damage" alright.... The lunatic is on the grass/ The lunatic is on the grass/ Remembering games and daisy chains and laughs/ Got to keep the loonies on the path.... The lunatic is in the hall/ The lunatics are in my hall/ The paper holds their folded faces to the floor/ And every day the paper boy brings more/ And if the dam breaks open many years too soon/ And if there is no room upon the hill/ And if your head explodes with dark forbodings too/ I'll see you on the dark side of the moon!!!

  3. It is amazing how selectively courts can read cases and how two very similar factpatterns can result in quite different renderings. I cited this very same argument in Brown v. Bowman, lost. I guess it is panel, panel, panel when one is on appeal. Sad thing is, I had Sykes. Same argument, she went the opposite. Her Rooker-Feldman jurisprudence is now decidedly unintelligible.

  4. November, 2014, I was charged with OWI/Endangering a person. I was not given a Breathalyzer test and the arresting officer did not believe that alcohol was in any way involved. I was self-overmedicated with prescription medications. I was taken to local hospital for blood draw to be sent to State Tox Lab. My attorney gave me a cookie-cutter plea which amounts to an ALCOHOL-related charge. Totally unacceptable!! HOW can I get my TOX report from the state lab???

  5. My mother got temporary guardianship of my children in 2012. my husband and I got divorced 2015 the judge ordered me to have full custody of all my children. Does this mean the temporary guardianship is over? I'm confused because my divorce papers say I have custody and he gets visits and i get to claim the kids every year on my taxes. So just wondered since I have in black and white that I have custody if I can go get my kids from my moms and not go to jail?

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