L Brands, Inc. (LB) Accused of Making False and Misleading Statements
According to the complaint against the company for alleged violations of the Securities Exchange Act of 1934 between May 31, 2018 and November 19, 2018, in an attempt to drive sales in the face of increasing competition, Victoria’s Secret and PINK engaged in heavy promotional activities that offered consumers large discounts and even gave away items free of charge. As a result, Victoria’s Secret and PINK’s combined annual operating income declined by approximately 61%. L Brands’ deteriorating operating performance and decreasing operating cash flows prompted analysts to frequently question the sustainability of L Brands’ dividends. L Brands’ CFO responded by assuring L Brands had sufficient cash flow to sustain its dividends and that “in history, has never reduced the dividend.” However, these statements proved to be material y false and misleading when in November 2018, just weeks after issuing these positive assurances, L Brands announced it was cutting its dividend in half. Since this news, L Brands stock price has declined almost 25% and currently trades at $26.00.
L Brands, Inc. (LB) Shareholders Have Legal Options
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