This is a securities fraud class action lawsuit against Sadia S.A.
The class action lawsuit alleges that Sadia entered into undisclosed currency derivative contracts to purportedly hedge against Sadia's U.S. dollar exposure. Sadia characterized the amounts of these contracts as "nominal."
However, these contracts violated Sadia policy in that they were far larger than necessary to hedge normal business operations and resulted in a loss of $365 million.
As a result of Sadia's admission of violating Sadia policy regarding currency hedging, the American Depository Receipts of Sadia S.A. closed at $9.50 per share, down from the previous day's close of $15.27, a decline of 38%.
Name (Stock Symbol)
Sadia S.A. (SDA)
Sadia S.A., processes poultry, and pork and other meats. Its products include frozen, refrigerated, salted and smoked pork cuts, lard, bacon, and ingredients for feijoada; frozen and refrigerated pork.
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