{"id":24604,"date":"2012-10-19T08:30:57","date_gmt":"2012-10-19T06:30:57","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=24604"},"modified":"2012-10-19T15:59:07","modified_gmt":"2012-10-19T13:59:07","slug":"google-shifts-blame-for-filing-blunder","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/internet\/24604\/google-shifts-blame-for-filing-blunder\/","title":{"rendered":"Google shifts blame for filing blunder"},"content":{"rendered":"

R.R. Donnelley & Sons Co<\/a> handles thousands of securities filings a year for corporate clients in a routine process that is invisible to most investors. On Thursday Google<\/a> and its shareholders found out just what happens when that process goes wrong.<\/p>\n

Google issued a statement blaming Donnelley, its filing agent, after the Internet search company’s quarterly results were released by the U.S. Securities and Exchange Commission hours ahead of schedule.<\/p>\n

Earnings were far less than analysts expected and Google shares immediately plunged as much as 10.5 percent, knocking $26 billion off its market capitalization – the equivalent, as it happens, of about 13 R.R. Donnelleys.<\/p>\n

It was quickly obvious that a mistake had been made — the second paragraph of the filing said “PENDING LARRY QUOTE” instead of an actual quote from Google CEO Larry Page<\/a> — but it was not clear why.<\/p>\n

Within minutes, though, an unknown prankster set up a “PendingLarry” Twitter<\/a> feed to hypothesize what the missing quote might be. Among the highlights: “Man, our privacy was WAY violated today.”<\/p>\n

Donnelley shares lost more than 5 percent after Google started pointing the finger, though they recovered later in the day. The company did not respond to a call for comment, but issued a statement to CNBC in which it said it was investigating the circumstances of the release.<\/p>\n

Best known as a provider of printing services, Donnelley is also the top SEC filing agent in the country, handling more than 75,000 submissions this year as of mid-October, according to SECInfo.com.<\/p>\n

Filing agents like Donnelley take paper documents and convert them for submission to the SEC in the appropriate format. The company also owns the filing portal EDGAR Online.<\/p>\n

Who goofed?<\/strong><\/p>\n

It is far from the first time a company’s earnings have somehow gotten out early.<\/p>\n

In late 2010 and early 2011, inadvertent releases – usually by a misplaced release on a website – plagued companies like Walt Disney Co<\/a> and Microsoft Corp<\/a>.<\/p>\n

The common thread in all of those cases is that investors who are not in the right place at the right time to see the news may suffer for it.<\/p>\n

“Some who didn’t get a chance to sell will try to, and others will be looking for bargains. I’m sure a lot of Google owners were caught off guard,” said Randy Frederick, managing director of active trading and derivatives for Charles Schwab in Austin, Texas.<\/p>\n

After the first question of “who goofed?” was sorted out Thursday afternoon, the second one being asked by investors was “can we sue?”<\/p>\n

“Everyone is trying to figure out if there’s any legal issue with respect to R.R. Donnelley. Google is halted, Donnelley is down big-time on the news since they’re allegedly not supposed to have released the information,” said Michael Matousek, senior trader at U.S. Global Investors in San Antonio.<\/p>\n

But one plaintiffs lawyer who sues companies on behalf of investors said shareholders would not have a claim against either Google or R.R. Donnelley because the earnings disclosure was likely a mistake.<\/p>\n

“There’s no fraudulent intent here,” said Reed Kathrein with Hagens Berman.<\/p>\n

R.R. Donnelley may not be entirely off the hook with Google, however. The company could have a negligence claim to recover any additional costs it incurred in responding to the incident, Kathrein said.<\/p>\n

Any potential damages against R.R. Donnelley could be limited, though, by the contract between the two companies.<\/p>\n

Late Thursday, Google filed an amended press release with the missing quote and a confirmation that the figures in the original were accurate.<\/p>\n

R.R. Donnelley shares were up 2 cents at $10.87 in late trading. Google was down 8.1 percent to $693.94 after trading resumed.<\/p>\n

Related articles<\/strong><\/p>\n

Is Google running out of steam?<\/strong><\/a><\/p>\n

Google has 4 months to change privacy policy<\/strong><\/a><\/p>\n

Google vs Apple a \u201cdefining fight\u201d<\/strong><\/a><\/p>\n

Google\u2019s Motorola beats Microsoft in patent case<\/a><\/strong><\/p>\n

Google warns of further restructuring at Motorola Mobility<\/strong><\/a><\/p>\n

Google denied summary judgement in patent dispute<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

R.R. Donnelley & Sons Co handles thousands of securities filings a year for corporate clients in a routine process that is invisible to most investors. On Thursday Google and its shareholders found out just what happens when that process goes wrong.<\/p>\n","protected":false},"author":7,"featured_media":4778,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9882],"tags":[25,4400,53,2273,4399,229],"class_list":["post-24604","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet","tag-active","tag-blunder","tag-google","tag-larry-page","tag-r-r-donnelley-sons","tag-results"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/24604","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=24604"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/24604\/revisions"}],"predecessor-version":[{"id":24658,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/24604\/revisions\/24658"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/4778"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=24604"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=24604"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=24604"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}