Robbins LLP announces that an investor of J.C. Penney Company, Inc. (NYSE: JCP) has filed a federal securities fraud class action complaint in the U.S. District Court for the Eastern District of Texas. The complaint alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934 from August 20, 2013 to September 26, 2013 (the “Class Period”).
JCPenney Accused of Failing to Disclose Insufficient Liquidity
Shares of JCPenney fell $1.37 per share, or 13%, on September 27, 2013, after the company issued a press release announcing the pricing of 84 million shares of its common stock at $9.65 per share in a secondary offering. In the press release, the company stated that it “intends to use the net proceeds from the offering for general corporate purposes.”
According to the complaint, JCPenney disseminated false and misleading statements to the public regarding the company’s finances, and misrepresented that the company would have sufficient liquidity to get through the year-end. The true facts were that JCPenney:
- would have insufficient liquidity to get through year-end and would require additional investments to make it through the holiday season; and
- was concealing its need for liquidity so as not to add to its vendors’ concerns
The truth was revealed on September 26, 2013, when analysts reported the company would need to take on additional debt to ensure that it had enough cash to keep its business operations going.
If you invested in JCPenney and would like to discuss your shareholder rights please contact attorney Darnell R. Donahue at (800) 350-6003 or you can complete the form below and we will contact you directly.