Navistar International and its auditor Deloitte & Touche may have failed to follow GAAP when preparing Navistar's financial statements, thereby misleading investors about the true financial condition of Navistar.
This is a securities fraud class action against Navistar International, certain officers and directors, and Deloitte & Touche (its auditors for the relevant time periods).
Navistar manufactures and distributes trucks, buses, and diesel engines.
The class action lawsuit alleges that for the years 2003, 2004 and 2005, Navistar systematically "cooked its books" to appear to have turned the corner to proftitability. The class action complaint alleges that most of these areas of misstatement were particularly subject to manipulation due to Navistar's use of aggressive and improper assumptions and accounting estimates. Navistar utilized undocumented and erroneous assumptions, made accounting estimates using suspect methodologies and procedures, and employed unwarranted and aggressive optimism. The misstatements resulted in improvements to Navistar's reported financial results by consistently overstating income and understating expenses over a three year period, further reflecting that the misstatements were not coincidental, but were knowing and intentional.
When the truth began to be revealed to the market, beginning on December 14, 2005 and continuing through July 17, 2006, Navistar's stock price fell from $30.28 to $20.95, a 30% drop.
Name (Stock Symbol)
Navistar International Corporation (NAV)
Navistar International Corporation, through its subsidiaries, manufactures and markets commercial trucks, buses, diesel engines, military vehicles, and chassis for motor homes and step-vans, as well as provides service parts for various trucks and trailers.
Deloitte & Touche
Deloitte & Touche is a global accounting and consulting firm.
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