WILMINGTON, Del.--(BUSINESS WIRE)--Stewarts Law US LLP (“Stewarts Law”) announces it has filed a class action lawsuit in the United States District Court for the Southern District of New York on behalf of all persons or entities who purchased the common stock of General Motors Company (NYSE: GM) (“GM” or the “Company”) pursuant and/or traceable to the Company’s November 18, 2010 Initial Public Offering (the “IPO”), alleging violations of the Securities Act of 1933 (the “Complaint”). The case is entitled Scott v. General Motors Co., et al., C.A. No. 1:12-CV-5124 (LTS) (S.D.N.Y.).
If you wish to view a copy of the Complaint, discuss this action, or have any questions concerning this notice or your rights or interests, please contact David A. Straite, Esquire or Noah R. Wortman, Director of Case Development of Stewarts Law at 1201 North Orange Street, Wilmington, Delaware 19801, by telephone at (302) 298-1200, or by e-mail at firstname.lastname@example.org.
The Complaint names GM, certain of its current and former officers and directors, and several underwriting investment banks as defendants and alleges that the Registration Statement and Prospectus issued by GM in connection with the IPO were false, misleading and in violation of the Securities Act of 1933. Specifically, the Complaint alleges, in connection with the IPO, and in order to assuage concerns that GM was predicting revenue based on production rather than actual sales, GM falsely assured investors that it was actively managing its production by monitoring its dealer inventory levels. Additionally, GM assured investors that in 2011 it would improve inventory management, which would improve average transaction price.
In July 2011, reports began to surface that GM had engaged in an extraordinary inventory build-up. In particular, an article published by Bloomberg on July 5, 2011 revealed that GM may have been unloading excessive inventory on dealers, a practice known as “channel stuffing,” in order to create the false impression that GM was recovering and sales and revenues were rising.
Indeed, on July 1, 2011, GM admitted on an investor conference call that it had substantially exceeded inventory targets. An article appearing on Barron’s on July 5, 2011 quotes Don Johnson, the VP of GM’s U.S. sales operations, who stated on an investor call that “[r]ight now we are at 122 day supply on full-size pickups. And this is slightly above where we would like to be. I acknowledge that our target is between 100 and 110 day supply but I think it's important that people realize why we are there and what we may do about it.” Thus, GM acknowledged that its target was above the 100 vehicle figure that industry experts considered excessive, and moreover GM exceeded even its own excessive target.
During the three months following the Bloomberg and Barron’s articles, GM’s share price fell from more than $31.00 to below $20.00, far below the IPO price of $33.00, and continues to trade around $20.00 today.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
Stewarts Law is an international litigation-only law firm with over 100 lawyers based in London, Leeds, New York and Delaware. Stewarts Law acts for corporate, institutional investor and individual clients and has leading and specialist departments in antitrust litigation, aviation and travel, clinical negligence, commercial litigation, divorce and family, employment, investor protection litigation and personal injury.
In particular, the Investor Protection Litigation Department has expertise in securities class action litigation and individual cases, mergers and acquisitions litigation, shareholder derivative actions and hedge fund/alternative entity litigation. The department, with offices in both the US and UK, is uniquely placed to meet the global litigation needs of international investor clients in the US, English and European courts. The department also handles all other US litigation needs, including complex consumer and digital privacy class action litigation.
Stewarts Law operates as Stewarts Law LLP in the United Kingdom and as Stewarts Law US LLP in the United States.
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