Oakley Misled Investors on Stock Price, Lawsuit Alleges
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SANTA ANA — Two Oakley Inc. shareholders filed a class-action lawsuit against the sunglass manufacturer Monday, saying the firm’s top management misled investors about the company’s distribution plans and the demand for its products to inflate the stock price.
The lawsuit also says the Foothill Ranch-based company misled investors about the availability of new products and about the negative impact that problems at Sunglass Hut, Oakley’s largest customer, would have on the company.
Using these tactics, the defendants conspired to boost the stock’s price from $17 per share to more than $24 per share in 1996, according to the lawsuit, which was filed in federal court on behalf of shareholders who bought stock in the company between March 22 and Dec. 5. During 1996, the lawsuit contends, the company’s executives sold millions of dollars worth of stock.
In early December, Oakley said it would halt shipments to Sunglass Hut for the rest of the year. That month, the stock, which had a 52-week high of $27.25, plunged to $9.50. The stock closed Monday at $10.25, down 13 cents a share.
Oakley officials could not be reached for comment Monday. The company has been the target of similar lawsuits.
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