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Groupon's Accounting Errors Lead to Lawsuit

Groupon's accounting is reportedly being probed by the SEC

Groupon's corporate accounting-related woes continue. Reuters reports that a shareholder in the online coupon company is suing for its concealment of internal controls and issuing misleading financial results to investors.

This comes on the heels of Groupon's restatement, issued last week, which admitted its internal controls had a material weakness and that its net loss was larger than previously reported. While Groupon spokeswoman Julie Mossler did not comment on the suit, Reuters says that other law firms could also be planning to sue the company.

The plaintiff, Fan Zhang, says in his complaint that when Groupon issued its prospectus and registration statement for its November 2011 IPO, it did not include the fact that it was not in compliance with laws in other countries, nor did it disclose its "poor and inadequate" internal controls, the news outlet notes.

According to The Wall Street Journal, Groupon may also be investigated by the Securities and Exchange Commission in the coming months. The probe, still in its preliminary stage, is related to the first time Groupon, as a public entity, released its financial results, an unnamed source told the newspaper. The SEC has not yet decided if the probe will turn into a formal investigation, the person said.