USA: Suprema Specialties faces class action lawsuit from investors
Connecticut-based law firm Scott + Scott LLC has announced that it has filed a class action in the US District Court for the District of New Jersey on behalf of purchasers of Suprema Specialties' publicly traded securities during the period between 8 August and 21 December last year, inclusive (the "Class Period").
The complaint charges Suprema, its CEO and President Mark Cocchiola and CFO Steven Venechanos with issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of Suprema publicly traded securities.
During this time, the defendants issued quarterly and annual press releases, and filed reports with the Securities and Exchange Commission (SEC) which favorably portrayed Suprema's business and financial performance. According to the allegations of the complaint, these representations were materially false and misleading because the company was using questionable accounting practices in reporting its financial performance, which distorted its reported financial statements.
On 8 November 2001, Suprema commenced a secondary offering of common stock, pursuant to a prospectus and registration statement filed with the SEC and containing allegedly misleading financial statements. The secondary offering saw Surpema, Cocchiola and Venechanos, and others, sell a total of 4,050,000 shares at a price of US$12.75 per share.
Only a few weeks later, on 21 December 2001, Suprema issued a press release announcing that it is conducting an internal investigation into the its previously filed financial statements, and that defendant Venechanos has resigned from his position as Suprema's CFO. Immediately after this announcement, the Nasdaq Stock Market halted trading in Suprema common stock, pending its receipt of additional information on the matter. Suprema common stock has not resumed trading over the Nasdaq Stock Market.
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