(RNN) - The sound of internet deal company Groupon's emergency brakes could be heard throughout Wall Street Monday as shares in the Chicago-based company's stock dropped 16.9 percent.
The drop comes just days after Groupon announced a revised fourth-quarter revenue of $492.2 million from $506.5 million – a 3 percent decrease.
The company, which began trading publicly in Nov. 2011, released a statement explaining that the revision was due to "an increase in the Company's refund reserve accrual to reflect a shift in the Company's fourth-quarter deal mix and higher price point offers, which have higher refund rates."
The internet rumor mill added to speculation that the company may be in trouble after an article in The Wall Street Journal claimed the SEC was examining the revision and in the "preliminary stages" of deciding if further investigation would be necessary.
Although a "person close to the matter" was sourced in the story, at this time the SEC is declining comment.
Groupon is no stranger to SEC problems, experiencing several issues with the way they wished to report revenue prior to its initial public offering. The company chose to change practices after federal regulators began to ask questions.
But while they may not agree on practices, Groupon does agree with the SEC on one level – declining to comment.
The National Shareholder Rights and Securities Law Firm of Gilman Law LLP, however, chose to dive head first into the controversy.
In a statement released Tuesday, the firm announced an investigation of a "potential breach of fiduciary duty claims by current shareholders of Groupon, Inc. ("Groupon") against the board of directors of Groupon in connection with alleged false revenue reports and misleading statements in violation of certain federal and/or state securities laws."
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