...a Philadelphia law firm filed a class-action lawsuit Friday against Cumulus, saying the company artificially inflated revenue by improperly recording sales contracts in violation of accounting standards.
By booking sales prematurely, the company raised false expectations about the value of its stock, claims the suit, which was filed in federal court in Milwaukee.
A Cumulus spokesman said: "We intend to vigorously defend our position. Our company remains financially strong, and we look forward to continuing to be so."
The suit capped a wild week that began with reports in a trade publication about possible financial irregularities at Cumulus. The reports helped drive the firm's stock price down 39% on Tuesday and Wednesday. Cumulus' stock has lost 74% since the end of last year...
Cumulus was founded in 1997, went public in 1998 and today owns or operates 321 radio stations in 64 midsize markets. Taking advantage of changes in federal regulations, Cumulus and other companies are buying clusters of radio stations to dominate individual markets.