Shareholders Sue Onyx Acceptance
Shareholders of Onyx Acceptance Corp. have sued the auto finance company, claiming its financial statements and other public comments were false and misleading, resulting in artificially inflated stock prices.
The suit against the Foothill Ranch company, filed in federal court in Santa Ana, alleges that for nearly two years sales and income figures were “materially inflated” because the company overvalued certain assets, according to a press release by the plaintiffs’ New York law firm.
As a result, the Rabin & Peckel LLP law firm contends, the stock price was artificially inflated throughout the period in which the plaintiffs purchased their shares. The suit was filed on behalf of those who bought stock between April 28, 1997, through Jan. 26, 1999.
A spokesman for Onyx, which was named last fall by Individual Investor magazine as one of America’s fastest-growing companies, said the company could not respond because it had not yet been served with the lawsuit.
Last year, federal regulators forced lenders to change the way they account for gains on sales, forcing Onyx and others to restate earnings.
The company’s earnings jumped 61% last year to $9.8 million, or $1.50 a share, while revenue climbed 47% to $88.9 million. Its stock lost 19 cents a share Thursday to close at $5.75 in Nasdaq trading.
