MGP Ingredients, Inc. (MGPI) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between February 27, 2019 and February 25, 2020, on February 27, 2019, MGP Ingredients, Inc. (MGPI) announced its fiscal year 2018 financial results and its outlook for fiscal year 2019 (“FY19”). MGP touted it was on track for strong growth due to its new aged whiskey strategy, which it claimed it had already entered into contracts to sell. Then, on May 1, 2019, MGP revealed financial results that fell short of expectations, but assured investors the Company was “confident in the plan to sell ” which will “make sure deliver annual guidance.” Despite MGP’s confidence in its strategy, the Company continued to deliver weak financials throughout the relevant period, each time assuring sales of aged-whiskey were expected to soon increase and enable MGP to still achieve its FY19 guidance. Then, on February 26, 2020, MGP revealed its FY19 financial results had fallen significantly short of its guidance, citing declining aged whiskey sales and failure to secure the contracts it had previously highlighted. On this news, the stock price fell to $28.42 per share, representing a 67% decline from its class period high of $88.06 per share.