UPDATE 1-Textura shares fall after short-seller Citron alleges fraud
(Adds Textura's response)
Dec 26 (Reuters) - Short-seller Citron Research accused software maker Textura Corp of lying to the Securities and Exchange Commission about the involvement of Chief Executive Patrick Allin in a "pump-and-dump" scheme.
Textura shares slid as much as 21 percent on Thursday.
The company, which went public in June, rejected the allegations in a press release, calling them "misleading" and "gross distortions".
"Textura's CEO failed to disclose personal involvement in Patron Systems Inc, a notorious OTC stock, pumped and dumped by perpetrators now in Federal prison," the Citron report said.
Perpetrators of a pump-and-dump scheme attempts to boost the price of a stock through recommendations based on false, misleading or greatly exaggerated statements. They then sell their positions after the hype has pushed the share price.
Patron Systems is a penny stock with a market value of $45,000.
Textura makes on-demand project management software to help commercial construction businesses. (http://link.reuters.com/hes65v)
Short sellers such as Citron make money when the stock price of a company drops. They sell borrowed shares in the hope of buying them back at a lower price and return them to the lender, and gain from the difference in price.
The Deerfield, Illinois-based company's shares were down 17 percent at $31.23 in late trading on the New York Stock Exchange.
(Reporting By Aditya Kondalamahanty in Bangalore; Editing by Joyjeet Das, Maju Samuel)