Stockholders v Trex Company, Inc.
Trex Company, Inc. Issued Materially False And Misleading Financial Statements
A class action has been filed against Trex Company, Inc. (NYSE:TWP), certain of its officers and directors by stockholders who purchased the company's common stock between October 25, 2004 and June 22, 2005. 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.
According to a press release dated July 8, 2005, the complaint charges Trex, Robert G. Matheny, and Paul D. Fletcher with violations of the Securities Exchange Act of 1934. More specifically, the Complaint alleges that the Company failed to disclose and misrepresented the following material adverse facts which were known to defendants or recklessly disregarded by them: (1) that the expected re-orders of inventory were not materializing, as Trex distributors worked to dispose of excess inventory; (2) that the expansion of the Company's distribution program with The Home Depot materially slowed due to delays in rolling out the Company's products; (3) that the Company cost cutting initiatives failed to limit the impact of higher raw material costs; (4) that there were manufacturing issues with the Artisan and Brasilia rail lines; and (5) that as a consequence of the foregoing, defendants' positive statements about the Company's growth and progress lacked in any reasonable basis when made. On June 22, 2005, Trex announced that the Company expected a substantial loss for the quarter and guided its earnings lower for the year. On this news, shares of Trex fell $10.59 per share, or 29.66%, on June 23, 2005, to close at $25.11 per share. During the Class Period, while Trex stock was trading at artificially inflated prices, insiders sold 680,395 shares for gross proceeds of $29,833,121.
If you bought Trex Company, Inc. securities between October 25, 2004 and June 22, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.
