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Stock Losses

Teva Logo and Lab Containers

A Teva Pharmaceutical Industries, Ltd. acquisition does not seem to have worked out well, but the complaint for this transaction alleges that Teva hid this fact, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The company praised the acquisition for months during the class period, but finally admitted that negative changes to the balance sheet were due to an impairment in goodwill and difficulties with the division involved in the acquisition.

Zillow Web Page

The complaint for this class action alleges that Zillow Group, Inc. made false or misleading statements about its compliance with government regulations which violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. At issue is Zillow’s co-marketing program, which allows mortgage lenders to pay for portions of real estate agents’ monthly advertising costs on Zillow websites. The complaint alleges that while Zillow was claiming compliance, it was also receiving notices from the Consumer Financial Protection Bureau saying that its advertising was violating federal regulations.

Top Ships Vessel at Sea

The complaint for this class action sets forth a complicated scheme by which the insiders at a shipping company, Top Ships, allegedly enriched themselves by decreasing the value of the company’s stock. The complaint alleges that CEO Evangelos J. Pistiolis engaged in a scheme with Kalani Investments Limited to create wealth for insiders at the company at the expense of shareholders. Here is how the complaint claims the scheme worked: Pistiolis had Top Ships sell common shares and securities convertible into common shares to Kalani at a discount. Kalani sold the shares, causing the price to decline. Top Ships then reverse split the stock, raising the price of the stock. Then, the process repeated. The purpose, the complaint says, was to provide money to insiders and give Top Ships financing for related-party transactions that benefit Pistiolis and his companies. 

PedMed Logo

The allegation this class action makes is that PetMed Express, Inc. has been marketing one of its medicines, “a dangerous and addicting synthetic opiate” called Tramadol, in such a way as to attract not just pet owners but opioid addicts. The complaint alleges that the company made false or misleading statements to hide these activities, and concerns raised by it, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint claims that the company’s official statements were misleading, since they did not disclose (1) that it was “marketing dangerous and addictive animal drugs to humans”, (2) that it was thereby risking civil or criminal liability and regulatory action, and (3) that Google might stop the company’s advertising activities.

Dr. Reddy's Building in India

How many adverse notices does a company need to receive before it admits it has quality control problems? This class action alleges that Dr. Reddy’s Laboratories made misleading or false statements about its quality processes, even after receiving a warning from the FDA that its facilities had serious defects. According to the complaint, the misleading statements are violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. As further information emerged, the company’s stock price fell, damaging shareholders. 

Corner Vitamin Shoppe

Vitamin Shoppe’s fortunes seem to have fallen, but this class action claims that the company gave the public a falsely optimistic view of its prospects and hid negative information. The complaint alleges that the company thus violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Among the omissions was a delay in taking a $168 million impairment charge in goodwill, which made the company’s financial projections non-GAAP and misleading, according to SEC regulations.

Volkswagen Logo

Volkswagen Aktiengesellschaft (VW) has been involved in a scandal involving antitrust allegations against it and other German carmakers. According to the complaint for this class action, the damage done by the company’s deceptions extends to holders of its stock. For years, the company’s annual reports touted its compliance, the complaint claims, including in the area of antitrust law, when all the while, the company was colluding with other German car makers.

Name "Equifax" on NYSE Board

It may be unnerving to learn that a company like Equifax, whose business is based on private information, has failed to protect that information. It may be maddening to learn that the company withheld news of the data breach until its CFO and other executive officers were able to sell their own shares. According to the complaint for this class action, it may also indicate a violation of the law, to the detriment of the other holders of the company’s stock. The complaint quotes Equifax’s press releases and filings, anticipating revenue increases and touting their investments in security, along with its failure to report the breach immediately, as providing false or misleading information to the public, in violation of the 1934 Act.

Health Insurance Innovations Logo

It seems that the denial of a license in a single state can be a very large problem for a company. According to the complaint, Health Insurance Innovations, Inc. (HII) anticipated a possibly disastrous “domino effect” from the denial of a license in Florida yet hid this from the public, in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint claims that the company downplayed the seriousness of the situation, attempting to portray it as a matter of simply missing some information “required to process the application.” 

Aqua Metals Facility

The complaint for this class action details the fall of Aqua Metals stock from $16.65 to $3.00 per share, over six months, alleging that the company gradually backtracked on positive statements and projections for its lead-processing enterprise. In essence, the company kept predicting the “ramping up” of production, while its breaking and separating process was experiencing difficulties that prevented the facility from going into serious production.

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