On May 20, 2018, investors sued PPG Industries, Inc. (“PPG” or the “Company”) in United States District Court, Central District of California. Plaintiffs in the federal securities class action allege that they acquired PPG stock at artificially inflated prices between April 24, 2017 and May 10, 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 PPG class action lawsuit:
Summary of the Allegations
The Company (NYSE: PPG) makes and distributes “paints, coatings and specialty materials” in the United States and globally.
According to its website, PPG’s history dates to 1883 “when Capt. John B. Ford and John Pitcairn started the first commercially successful plate glass factory in the United States at Creighton, Pa.”
In the early 20th century, the Company became a U.S. pioneer in terms of expanding business in Europe by acquiring a glass plant in Belgium. With a boom in the automotive industry and skyscraper construction, glass and paint sustained PPG’s growth in the 1920s. During the ensuing decades, the Company says, it continued to revolutionize the industry by taking advantage of economic trends and bringing new products to market.
Today, PPG maintains that it has stayed true to its founders’ ethos, and that it protects and beautifies the world by “offering customers in a wide range of markets and geographic locations unique technologies, services and other solutions.”
Summary of Facts
PPG and three of its current and former officers and directors stand accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.
Specifically, they are accused of omitting truthful information about PPG’s the efficacy of its internal controls, accuracy of certain financial statements and accounting practices from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused PPG stock to trade at artificially inflated prices during the time in question.
The truth began to emerge in a press release issued by the Company after the market closed on April 19, 2018. In it, PPG revealed that its receipt of a report “concerning potential violations of its accounting policies and identifying certain expenses that should have been accrued in the first quarter” had prompted an ongoing investigation.
Then, in another press release issued by PPG on May 10, 2018, the Company disclosed that its Audit Committee “found evidence that improper accounting entries were made by certain employees at the direction of PPG’s former Vice President and Controller.” It also disclosed that its former Vice President had been fired on May 10, 2018, and that it wouldn’t be able to file its Quarterly Report with the SEC on time.
A closer look…
As alleged in the May 20 complaint, PPG repeatedly made misleading public statements during the Class Period.
For example, on a form filed with the SEC at the beginning of the Class Period, PPG stated that: “there were no changes in the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.”
On October 20, 2017, the Company filed another form with the SEC in which it made the same statement. The form also contained signed SOX certification signed by two of the Individual Defendants that attested to “the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud.”
Finally, another form filed with the SEC on February 15, 2018, the Company reiterated the statement pertaining to its internal control over financial reporting for it most recent quarter. It also contained signed SOX certifications signed by two of the Individual Defendants that attested to “the accuracy of financial reporting, the disclosure of any material changes to the Company’s internal controls over financial reporting, and the disclosure of all fraud.”
Impact of the Alleged Fraud on PPG’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 July 19, 2017. 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 PPG common stock using court approved loss calculation methods.
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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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