Insider Selling/Undisclosed Related Party Transactions
Product or Service
This is a securities fraud class action lawsuit against Tween Brands Inc. and certain officers and directors.
The class action lawsuit alleges that Tween made false statements regarding its business beginning May 3, 2007 that allowed Tween's Chief Executive Officer to sell more than 68,000 shares on June 8, 2007, at prices above $41 per share, for proceeds of over $2.8 million and more than 82,000 shares on June 11, 2007 at prices of $41 or higher, for proceeds of over $3.3 million.
The class action complaint alleges that in May 2007 Tween announced positive earnings guidance for the second quarter 2007 of $0.13 to $0.16 per share which Tween deemed conservative, and earnings for fiscal 2007 of $2.15 to $2.25. Tween also announced a resumption of the Tween's share repurchase program up to $150 million over a two-year period beginning May 29, 2007. The market reacted favorably to this share repurchase plan and other positive statements by rising 2.9%. The class action complaint further alleges that even though Tween's CEO knew that consumer demand had fallen materially, that rents and marketing costs were ballooning, and that schools had pushed the beginning of the school year later into the summer, he knowingly or recklessly ignored these factors, and:
(a) stated that his "conservative" outlook for the second quarter was for earnings of 13 to 16 cents per share: and
(b) further caused the price of Tween Brands stock to be inflated by issuing a press release announcing a $150 million stock buy-back.
Even though Tween's CEO knew these statements were materially false and misleading, he sold his shares, and failed to update or correct his misleading pronouncements at any time during the second quarter. None of the adverse facts were disclosed until August 22, 2007, when Tween revealed that its financial performance during the second quarter had been weak, plagued by a decline in retail traffic, lower store transactions and other factors which appear to have been apparent during the quarter.
Tween announced that quarterly earnings would be only $0.07 per share. Tween was also forced to revise downward its prior guidance for fiscal 2007. On this wholly unexpected news the price of Tween Brands stock dropped $11.00 from $38.59 to $27.59.
Name (Stock Symbol)
Tween Brands, Inc. (TWB)
Tween Brands, Inc. and its subsidiaries operates over 550 Limited Too retail stores and 220 Justice stores.
The information provided on ClassAdvocate.com is general in nature,
does not apply to any particular factual situation, and is not and
should not be taken as legal or other professional advice. We make no
commitment or warranty that the factual, legal or any other information
on ClassAdvocate.com, or on any linked website, is accurate, complete,
error-free, or current. As such, you should not rely on such information,
and should seek professional advice if and as you determine appropriate.
ClassAdvocate.com is not a lawyer referral service, and no attorney-client
or confidential relationship is or should be formed by use of the site.
The investigations listed on ClassAdvocate.com are attorney advertisements
and do not in any way constitute a referral or endorsement by ClassAdvocate.com
or any approved or authorized lawyer referral service.