Abbey Gardy begins Class Action lawsuit against A&F Co
05 Sep '05
3 min read
Abbey Gardy, LLP commenced a Class Action lawsuit in the United States District Court for the Southern District of Ohio on behalf of a class (the "Class") of all persons who purchased or acquired securities of leading specialty retailer Abercrombie & Fitch Co between June 2, 2005 and August 16, 2005 inclusive (the "Class Period").
The Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of Abercrombie securities. The Complaint names as defendants Abercrombie, Michael S. Jeffries, Robert Singer and Michael W. Kramer.
The Complaint alleges that Abercrombie (a) carried out a scheme to deceive the investing public; (b) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and (c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high market prices for Abercrombie securities.
More specifically, the Complaint alleges that during the class period, Abercrombie made positive public announcements about its monthly and quarterly sales results while, at the same time they did not reveal that the Company's margins, a material indicator of the Company's true financial condition, would be lower in its 2005 second fiscal quarter. In July 2005, Abercrombie's Chairman and CEO sold more than 1.6 million shares of Abercrombie common stock reaping $118 million in profits based on negative, material Company information known to him, but unknown to Plaintiff and the Class. Following the revelation the Abercrombie's common stock price plummeted, resulting in substantial losses to shareholders.
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