Insider Selling/Undisclosed Related Party Transactions
Product or Service
This is a securities fraud class action lawsuit against Jos. A. Bank Clothiers, Inc. in which alleged that Jos. A. Bank violated federal securities laws by issuing a series of materially false statements.
Specifically, Jos. A. Bank failed to disclose the following:
(i) Jos. A. Bank had overinvested in inventories of fall clothing, building excessive levels of in-stock inventories of seasonal merchandise that carried over into the first quarter of 2006;
(ii) that Jos. A. Bank resorted to very aggressive promotional pricing in February and March 2006 which deeply discounted the prices of the merchandise in order to move the merchandise and make room for new seasonal merchandise; and
(iii) Jos. A. Bank's gross profit margins were substantially reduced in February and March 2006 by reason of the inventory and pricing actions taken by Jos. A. Bank which caused Jos. A. Bank's profit margins and profits in February and March 2006 to shrink dramatically even as sales revenues increased, which represented an extreme departure from Jos. A. Bank's historical pattern.
The complaint further alleges that on or around June 8, 2006, Jos. A. Bank announced that net income for the first quarter of 2006 had fallen 13% even as sales revenues increased 18%. On this news, Jos. A. Bank's common stock fell 29%, dropping $10.72 to close at $26.40 per share on June 8, 2006.
Additionally the securities fraud class action complaint faults the CEO of Jos. A. Banks for a systematic sale of a huge block of shares by him during the class period when the stock price waqs artifically elevated.
Name (Stock Symbol)
Jos. A. Bank Clothiers, Inc. (JOSB)
Jos. A. Bank Clothiers, Inc. is a menswear retailer with over 400 stores.
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