GTT Communications, Inc.

Case Details

Class Period:
February 26, 2018 – July 1, 2019
Date Filed:
July 30, 2019
Case Number:
1:19-cv-00982
Jurisdiction:
Virginia Eastern District

Case Summary

GTT provides cloud networking services to multinational companies. Since 2015, the Company pursued growth through a roll-up strategy in which it would acquire relatively small companies through “tuck-in” acquisitions. However, in February 2018, in sharp contrast to its historical strategy of acquiring smaller companies, GTT announced that it was purchasing Interoute Communications Holdings S.A. (“Interoute”), a telecommunications company that operated Europe’s largest cloud services platform in a transformational $2.3 billion acquisition that essentially doubled GTT’s size.

The Complaint asserts claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against GTT and certain of its senior executives (“Defendants”). The action alleges that during the Class Period, Defendants issued a series of false and/or misleading statements and failed to disclose material adverse facts about GTT’s business, operations, and prospects, and the Interoute acquisition specifically. Among other things, Defendants failed to disclose that: (1) there were delays in migrating Interoute’s legacy systems and processes into GTT’s client management database system; (2) Interoute had made a strategic shift to focus on providing cloud services that deviated from GTT’s core cloud networking business; (3) Interoute’s sales force was underperforming and ineffective at selling GTT’s core cloud networking services; and (4) as a result of the foregoing, Defendants’ public statements were materially false and/or misleading and/or lacked a reasonable basis.

Action Details

View Press Release

View Complaint (pdf)

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