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Investors Sue GM over IPO Claims
A Wayne, Pa.-based law firm says it has filed a lawsuit in federal court in New York City alleging that General Motors Co. engaged in securities fraud by misleading investors who bought stock at its initial public offering in November 2010.
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A Wayne, Pa.-based law firm says it has filed a lawsuit in federal court in New York City alleging that General Motors Co. engaged in securities fraud by misleading investors who bought stock at its initial public offering in November 2010.
The lawsuit, which seeks class-action status, alleges GM lied when it assured investors it was actively managing production by monitoring dealer inventories. The plaintiffs say the company also predicted it would improve inventory management in 2011, thus boosting transaction prices.
GM told investors in mid-2011 that it had exceeded its inventory targets. Some news media reported that the company was "channel stuffing" pushing dealers to accept unneeded vehicles to inflate wholesale volume, according to the lawsuit. It notes that in the following three months, GM shares plunged to less than $20 from the IPO price of $33.
The firm, Ryan & Maniskas LLP, says it is seeking a lead plaintiff to represent the class. New York City-based Faruqi & Faruqi LLP announced it is investigating similar claims against GM. The law firm is seeking investors who have lost more than $1 million as the company's shares tumbled.
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