NEW YORK--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/arconicinc/) announces that a class action lawsuit was commenced on behalf of purchasers of Arconic Inc. (“Arconic”) (NYSE:ARNC-B) Depositary Shares, each representing a 1/10th interest in a share of 5.375% Class B Mandatory Convertible Preferred Stock (the “Preferred Shares”) pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with Arconic’s September 18, 2014 initial public stock offering (the “Preferred IPO”). This action was filed in the United States District Court for the Western District of Pennsylvania and is captioned Sullivan v. Arconic Inc., et al., No. 2:17-cv-01213-MRH.
Pursuant to Court order, if you wish to serve as lead plaintiff, you must move the Court no later than 60 days from October 9, 2017. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/arconicinc/. Any member of the putative 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.
The complaint charges Arconic, its current and former officers and/or directors and the underwriters of the Preferred IPO with violations of the Securities Act of 1933. Prior to November 1, 2016, when the Company spun off its mining and manufacture of raw aluminum operations to the new Alcoa Corporation, Arconic was known as Alcoa Inc. Arconic is engaged in engineering and manufacturing aluminum and other lightweight metals into products used worldwide in the aerospace, automotive, commercial transportation, packaging, building and construction, oil and gas, defense, consumer electronics, and industrial industries. Arconic’s aluminum Reynobond PE panels consist of two sheets of thin aluminum, each permanently bonded to an extruded thermoplastic core, which are combined with insulation to form cladding used to cover residential and office towers and other commercial structures.
On or about July 11, 2014, Arconic filed with the SEC a Registration Statement on Form S-3, which would later be utilized for the Preferred IPO. On or about September 18, 2014, Arconic and the underwriters priced the Preferred IPO and filed the final Prospectus for the Preferred IPO. The Preferred IPO was successful for the Company and the underwriters, who sold 25 million Arconic Preferred Shares to the public at $50 per share, raising $1.25 billion in gross proceeds.
The complaint alleges that the Registration Statement was negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and was not prepared in accordance with the rules and regulations governing its preparation. Specifically, at the time of the Preferred IPO, Arconic had been knowingly selling its Reynobond PE panels for use on high-rise residential towers in the United Kingdom and other countries and knew that the product was being used in an inappropriate manner that could expose the Company to significant civil, regulatory and/or criminal liability. The uncertainty associated with these sales practices was reasonably likely to have a material impact on Arconic’s profitability, and, therefore, was required to be disclosed in the Registration Statement but was not.
On June 14, 2017, a fire engulfed Grenfell Tower, a 24-story, 220-foot high residential tower block of public housing flats in North Kensington, West London. The Grenfell Tower fire resulted in at least 79 fatalities and over 70 injuries. On June 24, 2017, Reuters reported that Arconic employees knew Reynobond PE panels were being used on the Grenfell Tower, despite the warnings in Arconic’s own sales brochures that such use was inappropriate and a fire hazard, and cited email communications of Arconic’s own personnel questioning the use of the cheaper but more dangerous product on the Grenfell Tower project. In response, the price of Arconic Preferred Shares declined on Monday June 26, 2017, trading as low as $36.24 in intraday trading, down nearly $4 per share, or 9.5%, from their close of $40.16 on June 23, 2017.
Then on June 26, 2017, Arconic confirmed that its aluminum product, Reynobond PE, was part of the cladding system on the outside of Grenfell Tower and announced that it would stop selling Reynobond PE panels for use on residential high-rises. In response to this news and other media reports regarding the Grenfell Tower fire, the price of Arconic Preferred Shares fell further, trading as low as $34.39 in intraday trading on June 27, 2017, and closing down more than $3 per share, another approximately 9% decline from their close of $37.72 per share on June 26, 2017.
Plaintiff seeks to recover damages on behalf of all purchasers of Arconic Preferred Shares pursuant and/or traceable to the Registration Statement issued in connection with the Preferred IPO. The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
In addition, a complaint was also filed on behalf of purchasers of Arconic common and preferred stock during the period from November 4, 2013 to June 26, 2017, inclusive (the “Class Period”), seeking to pursue remedies under the Securities Exchange Act of 1934. That complaint, captioned Howard v. Arconic Inc., et al., No. 2:17-cv-01057-MRH, was also filed in the United States District Court for the Western District of Pennsylvania. The Howard complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Arconic’s business and operations, including that, contrary to defendants’ representations that Reynobond PE was “a fully tested product, with building-code approvals throughout the world,” Arconic was knowingly selling Reynobond PE for use in construction projects where the product was to be used in a manner that the Company knew was unsafe and presented a fire hazard, and that Arconic’s marketing and sales of highly flammable Reynobond PE for use in high-rise tower projects across the United Kingdom and other countries directly conflicted with the purported strong culture of safety, ethics and legal compliance that the Company claimed to have and exposed Arconic to hundreds of millions of dollars in potential civil and criminal liability and reputational harm.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS’s SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.