Latch (LTCH) Financial Misreporting Settlement
Latch ($LTCH) reached a settlement with investors over claims that it didn’t report certain hardware sales, leading to inaccurate revenue for 2021 and early 2022. These issues led to restating financial reports, causing a sharp decline in stock price and prompting legal action from shareholders.
Latch went public in June 2021 through a merger with TS Innovation Acquisitions Corp. Shortly after, problems emerged regarding how the company was recognizing revenue, particularly from its hardware sales. These financial discrepancies led to errors in Latch's reporting, which they were forced to correct. The restatement of financial results caused a 12% drop in stock value, spurring investors to file a lawsuit.
June 3, 2021: This date marks Latch’s IPO through its merger with TS Innovation Acquisitions. Investors were optimistic due to the company's statements about its financial health and promising future. Following the IPO, Latch reassured investors of strong revenue performance and future growth.
August 25, 2022: Latch publicly admitted that it had made serious mistakes in its accounting, especially in how it reported revenue from hardware sales. The company announced that it would restate its financial reports for 2021 and early 2022 due to these errors.
August 26, 2022: As a result of this announcement, Latch’s stock dropped by 12.2%, closing at $0.95 per share.
August 2022: Investors filed a class action lawsuit, to demand compensation for misleading.
September 17, 2024: Latch agrees to settle with investors
After going public, Latch faced significant issues with how it handled its revenue.
Specifically, Latch failed to report certain sales arrangements related to its hardware, which caused the company to improperly recognize revenue throughout 2021 and into the first quarter of 2022. These errors showed weaknesses in the company's internal financial controls, meaning that their processes were not strong enough to catch these mistakes early on.
In August 2022, the company admitted it would have to restate its financial results because the revenue it had previously reported was inaccurate. Latch disclosed that it had been improperly accounting for hardware sales and highlighted serious flaws in its financial reporting controls. The company also highlighted serious flaws in its financial reporting controls. This caused the company's stock price to fall sharply, leading investors to realize that they had been misled about the company’s true financial health.
Latch, has agreed to settle the lawsuit to resolve all claims related to misleading statements made about its financial reporting and revenue recognition practices. The parties will now work to finalize the terms of the settlement and submit it to the court for approval.
If you were damaged due to this situation, you can file for a payout and get your share of the settlement. You can check if you are eligible and other details in the FAQ section below.
Frequently Asked Questions
All persons who purchased or otherwise acquired $LTCH, during the period from June 7, 2021, through October 30, 2023, inclusive.
No, if you have purchased securities within the class period, you are eligible to participate. You can participate in the settlement and retain (or sell) your securities.
The entire process usually takes 4 to 9 months after the claim deadline. But the exact timing depends on the court and settlement administration.
The final payout amount depends on your specific trades and the number of investors participating in the settlement.
If 100% of investors file their claims - the average payout will be $0.03 per share. Although typically only 25% of investors file claims, in this case, the average recovery will be $0.12 per share.
If you're eligible, you can file your claim directly from this case page by clicking the "Collect Payout" button.
More than 100 companies are currently paying out settlements. Connect your brokerage account to automatically check which ones you may have missed — or file manually for this case.
11th.com is an investor recovery company that helps investors track and collect securities class action settlements. We will:
1. Prepare documents for your payout.
2. Audit the claim and make sure you get the maximum possible payout.
3. File a claim with the settlement administration.
4. Correspond with the settlement administration to resolve emerging issues.
5. Deliver payout directly to your brokerage account.
There is no upfront cost, but we will deduct 20% of the recovered amount as a commission for our services.