General Motors Company (NYSE:GM) Shareholder Class Action Lawsuit

A class action lawsuit was filed on July 11, 2012 against General Motors for alleged violations of Federal Securities law in relation to the corporation’s Initial Public Offering in 2010. The case was filed in the New York Southern District of the U.S. District Court.

If you have purchased shares of General Motors Company (NYSE:GM)  during the November 18, 2010 Initial Public Offering, call 1-800-934-2921 right now to protect your rights.

Filing deadline: September 10, 2012


In the lawsuit, the plaintiff accuses GM of violations of the Securities Act of 1933. Certain officers, both current and former, as well as directors and banks which underwrote the offering are accused of making false and misleading statements in conjunction with the company’s IPO on November 18, 2010.

The suit covers all common stock purchases pursuant to or traceable to the initial offering. The complaint accuses the company of misleading potential investors about certain inventory practices. Both the Prospectus and Registration Statement are alleged to have contained this false and deceptive information.

Revenue predictions made in connection with the IPO were based on production levels rather than sales. According to the lawsuit, investors were led to believe that the company was closely monitoring inventory volumes at the dealer level to assure accurate revenue predictions. 

A July 1, 2011 conference call revealed that the company had significantly overbuilt inventory, according to the complaint. Prior to the conference call the company had given assurances to investors that its inventory management practices were improving, which would contribute to higher sales prices. 

The conference call preceded by just a few days media reports that GM was carrying excessive inventory. A July 5, 2011 Bloomberg article suggested that GM was stashing excess inventory with dealers in an attempt to appear in full recovery mode. This practice, known as “channel surfing,” created the impression that revenues were rising and excess inventory was falling.

According to a Barron’s article appearing the same day as the Bloomberg report, GM VP Don Johnson told investors that a 122 day stock of full-size pickups was being held. This far exceeded industry standards, and even surpassed GM’s goal of a maximum 100 day supply.

General Motors reported annual revenue in 2009 at $104.58 billion and $150.27 billion in 2011. Net income of $9.19 billion was reported in 2011, up from $6.17 billion in 2010. 

Stock prices, however went from $39 per share in January, 2011 to $20.27 at the end of December that same year. On July 13, the stock closed at $19.62. It originally sold for $33.00 at the IPO.

Own shares of General Motors Company (NYSE:GM)? Contact us to protect your rights.

If you have purchased shares of General Motors Company (NYSE:GM)  during the November 18, 2010 Initial Public Offering, call 1-800-934-2921 right now to protect your rights., complete the form on this page or call attorney Bill Kyros at 1-800-934-2921 right now to protect your rights. The deadline for this lawsuit is 04/24/12. 

Free Consultation

Complete the form on this page for a free no obligation consultation with an experienced securities lawyer.
 
By submitting this form, you accept our privacy policy.
captcha
Reload

Free Consultation

1-800-934-2921