(CN) – A shareholder of Booz Allen Hamilton claims in a class action that the government contractor purposefully concealed details about an ongoing Department of Justice investigation in order to inflate its stock value.
In a complaint filed Tuesday in the Eastern District of Virginia, plaintiff Jeremy Langley says the deceptive stock sales began on or about May 19, 2016 and continued through last week.
Langley, relying on conference call logs, analyst reports, press releases and Booz Allen filings with the U.S. Securities and Exchange Commission, says the company “made materially false and misleading statements regarding the company’s business, operational and compliance policies.”
Specifically, Langley says, Booz Allen failed to disclose that its improper accounting practices has led to a government investigation into its billing practices.
He says it wasn’t until June 7 that the company disclosed it is being investigated by the Justice Department for its “indirect cost charging practices” in regard to government contracts.
Once revealed, Booz Allen’s share prices plummeted and this, Langley says, led to his incurring significant financial losses.
According to Booz Allen’s latest financial reports, the firm rakes in roughly $2.7 billion annually from defense contractors and another $1.3 billion from the National Security Agency.
Booz Allen also nets about $1.6 billion from contracts with various federal agencies and departments.
Langley is represented by Elizabeth Aniskevich of Cohen, Milstein, Sellers and Toll, a Washington, D.C.-based firm and attorneys Jeremy Liberman, J. Alexander Hood II, Hui Chang and Patrick Dalhstrom of the New York firm Pomerantz LLP.
A representative of Booz Allen Hamilton could not immediately be reached for comment.