A class action suit alleging violations of federal securities laws by CPI Corp. has been commenced in the United States District Court for the Eastern District of Missouri. The class action is on behalf of CPI common stock purchasers from April 20, 2010 to December 21, 2011. As a result of this action, investment attorneys are seeking investors of CPI that have potential claims against the company. Through wholly-owned subsidiaries, CPI is a holding company that sells and manufactures professional portrait photography of individuals, families and young children.
According to the complaint, CPI is charged with violating federal securities laws and issuing materially false and misleading statements. These statements were regarding CPI’s business and financial results. According to plaintiffs’ allegations, CPI concealed the following facts:
- The company’s business growing initiatives were not working as represented.
- The company’s stock could not be considered a “good investment.” Furthermore, stock buy-back was intended to project false confidence.
- The company’s business was deteriorating and performing much worse than was acknowledged by the defendants.
- The company’s poor revenue growth would cause a continued deterioration of CPI’s cash flows.
According to CPI’s announcement of the results for the fiscal quarter ending November 12, 2011, the company’s net sales declined 11 percent and CPI had suffered a net loss of $7.25 million. The results of the report meant that the company did not pass its leverage ratio test for its revolving credit facility. As a result of this announcement, which occurred on December 22, 2011, the company’s stock fell almost 63 percent.
Investors who acquired, through purchase or other means, CPI Corp. stock between April 20, 2010 and December 21, 2011 may have a valid securities arbitration claim. If you currently own, or have lost money as a result of a transaction of these shares, find out more about your legal rights and options by contacting an investment attorney at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.