Stockholders v Salton, Inc.
Investors File Lawsuit Against Salton After George Forman Grill Pricing Scheme Debacle
Several class actions have been filed against home appliance manufacturer Salton, Inc. (NYSE:SFP) and certain of its officers and directors by stockholders who purchased the company's common stock between November 11, 2002, and May 11, 2004. The actions claim 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.
The lawsuit alleges that Salton failed to disclose and misrepresented the following material adverse facts: (1) the company's core competency, the marketing and distribution of grills under the Foreman brand name, was severely undermined by the antitrust lawsuits that precluded it from continuing with its profitable, but illegal, pricing scheme; (2) as a result of the foregoing, its historically profitable domestic business continued to erode, forcing Salton to incur an additional $8 million in retailer advertising and promotional expenses, which were required to secure and regain shelf space; and (3) due to the deterioration of its business model Salton violated its debt agreements.
On May 10, 2004, Salton, after the close of trading, announced its results for the fiscal quarter ended March 27, 2004-- a loss of $58.0 million ($5.14 per share), versus a loss of $12.1 million ($1.08 per share) for the third quarter of fiscal 2003. This news of this shocked the market, shares of Salton falling $3.34 per share or 49.93% on May 10, 2004, to close at $3.35 per share.
If you purchased securities issued by Salton during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by July 23, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve as you in this action, or you may choose to do nothing, and remain in the class as a silent member.
