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UPDATE 1-Textura shares fall after short-seller Citron alleges fraud

Thursday, 26 Dec 2013 | 3:58 PM ET

(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)

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