US-based law firm Lieff Cabraser Heimann & Bernstein announced that it is bringing a class action lawsuit against Bollywood production house Eros International on behalf of investors who purchased securities of the company. The law firm alleges that Eros made misleading statements and failed to disclose that Eros enriched its controlling family at the expense of shareholders through a series of related-party transactions. Here's a timeline of events from the October which lead to the law suit: -October 26: Eros International's stock rating was downgraded by the Wall Street bank Wells Fargo. According to the investment bank, Eros’ continued increase in revenues from the UAE is unexplained. The downgrade pushed Eros' stock value on the NYSE down. Overall, the company’s stock fell 16.6% on the New York Stock Exchange after the rating, while on the BSE, its subsidiary Eros International’s stock fell by 3.8%. - October 26: Eros acknowledged the downgrade of its stock rating and said that downgrades and upgrades happen to stocks regularly and that this was not a cause for concern. The company also held a call with analysts to counter the allegations. However, Wells Fargo was not convinced and released a report the same day. The investment bank said that “Management broke down the receivables in a very detailed manner, but quite frankly it was still difficult for the analysts on the call to fully grasp the collection cycle and movement of funds (particularly deals booked in the UAE).” - October 30: US-based research firm Alpha Exposure published an article which alleged that Eros has been overstating its theatrical…
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