CPI Corp. Hit By Investor Class Action Lawsuit Over Alleged Securities Laws Violations
San Diego, Jan. 13, 2012 (Shareholders Foundation) --An investor in NYSE CPY shares filed a lawsuit in the U.S. District Court for the Eastern District of Missouri against CPI Corp. over alleged Violations of Federal Securities Laws by issuing allegedly materially false and misleading financial statements.
According to the complaint the plaintiff alleges on behalf of purchasers of CPI Corp. (NYSE:CPY) common stock during the period between April 20, 2010 and December 21, 2011, that CPI Corporation and certain of its officers and directors violated the Securities Exchange Act of 1934 by allegedly issuing materially false and misleading statements regarding CPI Corp’s business and financial results.
Specifically the plaintiff alleges that the defendants represented that CPI Corp’s initiatives to grow the business were working, that it was well positioned for growth and that its stock was a "good investment" when it was trading at $22 per share.
Shares of CPI Corp. (Public, NYSE:CPY) rose from $1.09 per share in December ’08 to over $30 in December 2010. However, since then NYSE CPY shares lost substantially value and traded recently at slightly above $1.50 per share.
CPI Corp. reported that its Total Revenue decreased from $465.55million for a 53weeks period ending on Feb 7, 2009 to $407.04million for a 52weeks period ending on Feb. 5, 2011, however its Net Income increased over the same time frames from a Net Loss $6.72million to a Net Income of $11.91million.
Then on December 22, 2011, CPI Corp. had announced its financial results for its third fiscal quarter ended November 12, 2011.
CPI Corp. reported a net loss of ($7.25) million or ($1.03) diluted earnings per share for the third quarter and that net sales declined 11% to $95.0 million.