Stockholders v Charlotte Russe Holding, Inc.
Charlotte Russe Stockholders Seek to Recover $68M for Lost Value of Stock
A class action has been filed in the Southern District Court of California against Charlotte Russe Holding, Inc. (NYSE: ) and certain of its officers and directors by stockholders who purchased the company's common stock between January 22, 2004 and December 6, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
Specifically, the complaint alleges that the company, a mall-based specialty retailer of apparel and accessories operated 311 stores throughout 38 states and Puerto Rico. The company reported that the Company was doing well and anticipated positive fourth quarter results for 2004. However, on September 9, 2004, the company revised its guidance and predicted diluted earnings for the period due to the economy.
More specifically, the complaint alleges that the company failed to disclose:
• That the strategic repositioning of the stores was failing to produce tangible results
• That other measures, promoted by management as actions designated to improve operations, were proving futile in both the merchandising and store organizations
This announcement caused the company's stock to decline 23.44%.
In addition, on December 6, 2004, the company reported that the Executive Vice President and General Marketing Manager had resigned. On this news, the company's stock fell another 7.52%.
