Publicly owned corporations enjoy many benefits, but those benefits carry with them a cost. Specifically, they face higher standards of scrutiny and may come under fire for even innocent mistakes. In that vein, California readers may be interested to hear of a shareholder lawsuit alleging that Groupon committed fraudulent business practices.
Recently, Groupon informed investors that the company had made a mistake in its accounting for refund reserves. The mistake meant that the fourth quarter revenue last year was $14.3 million less than believed. The discrepancy was evidently caused by a failure on Groupon’s part to take customer refunds properly into account. There were more refunds than usual at the end of last year.