Conduent, Inc. (CNDT) Securities $32M Settlement

Conduent (CNDT) agreed to pay $32 million to settle a securities class action lawsuit to avoid further litigation.

The original complaint alleged that throughout 2017 Conduent (CNDT)and its 2 most senior officers repeatedly represented that Conduent was going through a one-year transformation and would exit as a unified business with cohesive information technology.

On February 21, 2018, the Company and its Leaders represented to shareholders on a conference call that it had “made impressive progress towards transforming our company in almost every dimension, with every function and unit contributing in some way.” The Company and its Leaders repeated those representations in press releases and conference calls throughout 2018. These representations led to a two-day stock price increase of 14.3%.

The Complaint alleged the truth was revealed on November 7, 2018, when the Company and its Leaders acknowledged that Conduent (CNDT) had suffered reduced Q3 and projected Q4 operating results caused by “continued suboptimal performance from an inherited legacy technology vendor. The performance issue stems from the vendor’s inability to deliver on service level agreements, lack of responsiveness to Conduent’s needs, and poorly structured contract which we inherited” and that an “outdated and historically under-invested legacy IT infrastructure has caused major disruptions to our operations and impacted clients and delivery performance.”

These true facts caused Conduent's (CNDT) common stock down 29.1%.