Michelle Keahey, East Texas Bureau Oct. 9, 2013, 1:28pm
TYLER - A JCPenney stock holder has filed a securities class action suit alleging that the company concealed vital information from investors in order to keep stock prices at artificially inflated prices.
Alan B. Marcus, individually and on behalf of all others similarly situated, filed suit against J.C. Penney Co. Inc., Myrone E. Ullman III and Kenneth H. Hannah on Oct. 1 in the Eastern District of Texas, Tyler Division.
Marcus filed the lawsuit on behalf of all persons who purchased the common stock of JCPenney between Aug. 20 and Sept. 26.
The claims are made against JCPenney and certain officers who allegedly made “false and misleading statements” in press releases, analyst conference calls and filings with the U.S. Securities and Exchange Commission.
The lawsuit claims that the false statements resulted in JCPenney’s stock trading at artificially inflated prices during the class period, reaching a high of $14.47 per share on Sept. 9.
On Sept. 27, JCPenney issued a press release which resulted in stock prices plummeting to $9.05 per share.
The defendants are accused of concealing from the investing public that the company would have insufficient liquidity to get through year-end and would require additional investments to make it through the holiday season. The company is also accused of concealing its need for liquidity so as not to add to its vendors’ concerns.
The defendant is accused of making false statements, failing to disclose adverse facts, deceiving the investing public, artificially inflating the price of JCPenney common stock, causing class members to purchase the stock at inflated prices and permitting one of JCPenney’s largest shareholders to sell 39.07 million shares of its stock at artificially inflated prices for proceeds of over $504 million.
Marcus is represented by David C. Whelton and Darren J. Robbins of Robbins Geller Rudman & Dowd LLP in San Diego, Calif.; Samuel H. Rudman of Robbins Geller Rudman & Dowd LLP in Melville, N.Y.; and T. John Ward Jr. and J. Wesley Hill of Ward & Smith Law Firm in Longview.
A jury trial is requested.
U.S. District Judge K. Nicole Mitchell is assigned to the case.
Case No. 6:13-cv-00736