Pomerantz Law Firm Announces the Filing of a Class Action against Sinclair Broadcast Group, Inc. and Certain Officers – SBGI
NEW YORK, Sept. 26, 2018 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Sinclair Broadcast Group, Inc. (“Sinclair” or the “Company”) (NASDAQ: SBGI) and certain of its officers. The class action, filed in United States District Court, Southern District of Florida, and index under 18-cv-02967, is on behalf of a class consisting of all persons other than Defendants who purchased or otherwise acquired Sinclair securities between February 22, 2017 and July 19, 2018, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased Sinclair securities between February 22, 2017, and July 19, 2018, both dates inclusive, you have until October 9, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Sinclair, headquartered in Hunt Valley, Maryland, is the largest television station operator in the United States by both number of stations and total coverage. The Company owns more than 193 stations across the country, covering nearly 40% of American households.
The Company is controlled by four brothers, David D. Smith, Sinclair’s Executive Chairman since January 2017, President and Chief Executive Officer from 1988 until January 2017, and Chairman of the Board since September 1990; Frederick Smith, Sinclair’s Vice President and director; J. Duncan Smith, Sinclair’s Vice President, Secretary and director since 1986, and Robert Smith, a director of Sinclair since 1986 (collectively, the “Smith Brothers”). Together, the Smith Brothers own a 75% interest in Sinclair, including all of the Company’s Class B common stock.
During the Class Period, Sinclair announced a proposed $3.9 billion merger with Tribune Media Co. (“Tribune”), which the Company called the “largest acquisition” in the Company’s history. Throughout the Class Period, Defendants made materially false and misleading statements assuring investors and the FCC that it was using its “best efforts” to obtain regulatory approval and close the deal and that the Company would sell or divest certain stations as necessary “in order to comply with FCC ownership requirements and antitrust regulations.”
However, during the Class Period, Defendants engaged in a fraudulent scheme to deceive the FCC and the investing public by creating “sham” transactions with buyers intertwined with the Company and its controlling shareholders, the Smith Brothers, in an effort to misleadingly convince regulators that Sinclair’s proposed merger was in compliance with FCC ownership regulations.
The truth began to emerge on July 16, 2018, when it was reported that FCC Chairman Ajit Pai was internally circulating a draft order designating the Sinclair/Tribune merger proposal for a hearing in front of the FCC’s administrative law judge – a designation widely considered to be a death sentence for proposed mergers – because of “serious concerns” that “Sinclair’s actions here potentially involve deception.”
On this news, shares of Sinclair fell $3.85, or 11.6%, to close at $29.10 on July 16, 2018, wiping out more than $292 million in market capitalization. Sinclair’s stock price continued to fall in the following days, closing on July 18, 2018 at $27.40, representing a three day drop of nearly 17%, wiping out a total of $425 million in market capitalization.
Then, after the markets closed on July 18, 2018, despite the Company’s last-ditch effort to avoid a hearing by withdrawing the improper sales, the FCC unanimously voted to send the proposed merger to a hearing. The FCC publicly released the final HDO on July 19, 2018 in which the Commission stated that there was “a substantial and material question of fact as to whether Sinclair affirmatively misrepresented or omitted material facts” regarding whether Sinclair had “attempted to skirt the Commission’s broadcast ownership rules.”
On this news, on July 19, 2018, Sinclair stock dropped again by $1.10, or 4%, wiping out an additional $84 million in market capitalization, and resulting in a total stock price decline over four days of more than 20%.
On August 9, 2018, in an emailed statement, Tribune announced its withdrawal from the $3.9 billion merger and said that it had filed a lawsuit in the Delaware Chancery Court against Sinclair seeking $1 billion in damages for losses incurred as a result of Sinclair’s “material breaches” of the merger agreement.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s securities, Plaintiff and the other Class members have suffered significant losses and damages.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com