On April 25, 2018, investors sued Aceto Corporation (“Aceto” or the “Company”) in United States District Court, Eastern District of New York. Plaintiffs in the federal securities class action allege that they acquired Aceto stock at artificially inflated prices between February 1, 2018 and April 18, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. Here’s everything you need to know about the Aceto class action lawsuit (ACET class action lawsuit):
Summary of the Allegations
The Company (NASDAQ: ACET) engages in the marketing, sales and distribution of human health products, pharmaceutical ingredients, and “performance chemicals.” Its products include “finished dosage form” generics, nutritionals, pharmaceutical intermediates, active pharmaceutical ingredients, specialty chemicals and agricultural protection products.
Incorporated in 1947, Aceto has business operations in 10 countries and uses its “global reach” to source and supply quality products on a worldwide basis.” Aceto says it sources more than two-thirds of its products from Asia, buying from approximately 500 companies in China and 200 in India.
The Company touts its relationships, global technical network and experienced staff as significant assets.
Summary of Facts
Aceto and two of its current and former senior officers now stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.
Specifically, they are accused of omitting truthful information about Aceto’s business, operational and compliance policies from SEC filings and related material. By doing so, they allegedly caused Aceto stock to trade at artificially inflated prices during the time in question.
The truth emerged after the market closed on April 18, 2018. That’s when the Company revealed that, “the financial guidance issued on February 1, 2018, should no longer be relied upon,” and halted “further financial guidance for at least the balance of the fiscal year.” The Company also announced the resignation of its chief financial officer (CFO), who had been with Aceto for only two months. The former CFO is one of the Individual Defendants named in the current lawsuit.
A closer look…
As alleged in the April 25 complaint, Aceto repeatedly made misleading public statements throughout the Class Period.
For example, in a press release issued on February 1, 2018, the Company provided financial guidance that included a 10 to 15 percent increase in total revenues.
During an earnings conference call held the next day, the Company’s CEO, also named as an Individual Defendant in the current lawsuit, said in pertinent part: “Our results for the second half of fiscal 2018 are expected to be modestly better than the first half of the year.”
What Aceto didn’t say, however, was that it was “unlikely to meet the performance metrics the Company provided to investors as financial guidance” due to “undisclosed competitive and pricing pressures.” The Company also failed to disclose that its financial guidance was overstated as a result of its inability to meet its goals.
Impact of the Alleged Fraud on Aceto’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is June 25, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Aceto common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
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Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.
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