An investor has sued executives at Liquidity Services Inc., (LSI) an auction company, on behalf of the company. It’s claimed that the executives knew an attempt to lessen the company’s reliance on defense contracts was failing, but didn’t tell investors. Instead, the named Defendants – all executive board members – allegedly made $106 million off of insider trades. In the suit, filed in Washington, D.C., federal court, Thomas Billard, the named Plaintiff, claims that LSI founder and CEO William P. Angrick III, former CFO James M. Rallo and eight current or former board members misled the public about the auction company’s finances between 2012 and 2014. It’s alleged that all but two of three directors engaged in insider trading.
Billard alleges that the company, which had historically received a majority of its revenue from contracts to auction off scrap for the U.S. Department of Defense (DOD), made failed attempts in 2012 to diversify its business by buying two other companies. The companies, GoIndustry and Network International, auction competitors, did not perform well after merging with LSI. It appears the executives did not fulfill their responsibility to disclose that fact to investors.
Attorneys for the Plaintiff are Elizabeth K. Tripodi and Donald J. Enright of Levi & Korsinsky LLP and Peter C. Harrar, Benjamin Y. Kaufman, Daniel Tepper, Gloria Kui Melwani of Wolf Haldenstein Adler Freeman & Herz LLP. The case is Billard v. Angrick et al., in U.S. District Court for the District of Columbia.