By Jim Bleyer
Accusations that Ubiquiti, a tech company heavily promoted by St. Petersburg-based Raymond James & Associates, committed fraud have gained traction with stock analysts and law firms seeking damages during the past week.
Ubiquiti, a manufacturer of wireless data communication and wireless broadband products, has been relentlessly touted by Raymond James over its six-year history as a publicly traded company. The securities firm could very well be named as a co-defendant in what appears to be the imminent filing of multiple lawsuits.
Seeking Alpha, a respected online stock analyst, made its own independent study and found Ubiquiti lied about its activities in the Ukraine and Latvia.
The company was also criticized by Seeking Alpha for not having a Chief Financial Officer. Bloomberg chimed in by declaring Ubiquiti doesn’t adhere to best practices, especially for a company with a market cap of around $4 billion.
Amid calls for more transparency, quite a euphenism, Ubiquiti President Robert Pera did next to nothing to assuage stockholders and analysts at a Sept. 26 meeting. Pera is the majority owner of the NBA’s Memphis Grizzlies.
Meanwhile, the number of law firms either bringing or on the verge of filing class action suits has swelled from three to at least seven since Tampa Bay Beat first reported the Raymond James-associated drama on Sept. 24.
Ubiquity has been heavily promoted by Raymond James ever since the conpany’s initial public offering in 2011. Raymond James along with UBS Securities LLC, Deutsche Bank Securities Inc. handled the IPO.
The problems for Ubiquiti and Ray Jay were triggered on Sept. 18 in a report by Andrew Left, managing editor of stock research firm Citron. He noted some suspiciously impressive metrics from Ubiquiti, including 33.5-percent operating margin and 49.2-percent return on equity, as the basis of his fraud thesis. “Either Robert Pera is the best CEO in networking equipment, or Ubiquiti is committing FRAUD,” Left wrote.