Press release from Business Wire
Newman Ferrara LLP Announces Securities Class Action Against Tile Shop Holdings, Inc. and Advises of Lead Plaintiff Deadline
Thursday, November 21, 2013
Newman Ferrara LLP Announces Securities Class Action Against Tile Shop Holdings, Inc. and Advises of Lead Plaintiff Deadline14:25 EST Thursday, November 21, 2013
NEW YORK (Business Wire) -- Newman Ferrara LLP announces that a class action lawsuit has been filed in the Unites States District Court, Southern District of New York against Tile Shop Holdings, Inc. (“Tile Shop” or the “Company”) (NASDAQ: TTS) (“Tile Shop” or the “Company”) and certain officers and directors, alleging violations of federal securities laws.
Investors who purchased Tile Shop securities between August 22, 2012 and November 13, 2013 (the “Class Period”) may apply with the Court to be appointed Lead Plaintiff no later than January 14, 2014. The Lead Plaintiff will direct the litigation on behalf of the other class members.
According to the complaint, the Tile Shop issued materially misleading business information to investors, including the fact that it used an undisclosed related party to help overstate earnings which thus caused its share price to be artificially inflated.
On November 14, 2013, Gotham City Research LLC issued a report alleging that Tile Shop had greatly exaggerated its true financial performance. The report stated that: the Company's largest supplier, Beijing Pingxiu, is an undisclosed related company secretly controlled by Fumitake Nishi, the brother-in-law of Tile Shop's CEO and an employee of the Company; Tile Shop uses Beijing Pingxiu to overstate inventories, understate cost of sales and overstate gross profits; Beijing Pingxiu sells goods to Tile Shop at or near cost to allow the Company to achieve an artificial cost advantage; and Tile Shop's 2013 earnings are overstated by over 200%. As a result of the release of this report, the price of Tile Shop publicly-traded stock closed on November 14, 2013 at $12.95 per share, down $8.26 for the day, a market capitalization drop of over $400 million.
Investors who purchased shares of Tile Shop during the Class Period may contact Newman Ferrara partner Jeffrey M. Norton (firstname.lastname@example.org) by email or call (212) 619-5400 to discuss this lawsuit or the Lead Plaintiff process.
Whistleblowers: Persons with knowledge that may aid in the investigation of this matter are encouraged to contact the firm. Under the Dodd-Frank Wall Street Reform Bill, whistleblowers are protected from employer retaliation and may be entitled to as much as 30 percent of the recovery if the information provided leads to a successful action.
Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation, securities fraud and shareholder litigation, consumer protection, civil rights, and real estate. For more information, please visit the firm website at www.nfllp.com.
Newman Ferrara LLP
Jeffrey M. Norton, 212-619-5400