A class action lawsuit was recently filed by shareholders of Anheuser-Busch InBev SA/NV (the “Company” or “Anheuser-Busch”) in the United States District Court for the Southern District of New York. The suit alleges that the Company and several of its officers intentionally misled shareholders about Anheuser-Busch’s profit outlook during a revenue period in 2018, providing materially false information about their operations that inflated their stock price. Companies are required to disclose information that could have a significant impact on their stock price; failing to do so is a violation of federal securities regulations.
An institutional investor is the lead plaintiff in this case, which includes those people and entities who purchased Anheuser-Busch American Depository Shares (“ADSs”) between March 1, 2018 and October 24, 2018 (the “Class Period”). The Company, which produces and distributes alcoholic beverages and soft drinks, is accused of making false statements to shareholders regarding its business operations and revenue prospects.
Anheuser-Busch allegedly failed to disclose important information to shareholders, including the lapse of its cost-cutting measures; the impact of falling currency values in key emerging markets on its profits; the inability to meet its projected profit growth goals; and the risk of having its credit rating downgraded. In addition, the suit alleges that the Company’s filings with the SEC contained materially false information, including working capital disclosures and certifications by its C-level executives. As a result, plaintiff alleges that all of the positive statements the Company made about its profit forecasts were without merit and may, in fact, be fraudulent.
Disclosures Caused Drop in Stock Prices
All of these facts would have had a profound impact on Anheuser-Busch’s stock price if they had been disclosed in a timely manner. Withholding this information caused the Company’s stock price to be artificially inflated to $117 per share during the Class Period. When Anheuser-Busch announced its earnings on October 25, 2018 for the quarter and the fiscal year period ending on September 30, 2018, along with the news that it was cutting its dividend by 50 percent in order to get back on track, its stock price immediately dropped to $74.54 per ADS, a 9.5 percent decrease.
The allegations in the lawsuit are violations of the Securities Exchange Act of 1934. Companies that commit securities fraud can face serious penalties and be forced to pay significant damages to members of the class.
Securities Litigation Lawyers at SFMS Provide Comprehensive Representation in Class Action Lawsuits
Class action lawsuits are highly complex, and securities regulations can be difficult to navigate. The attorneys at Shepherd, Finkelman, Miller & Shah, LLP have extensive experience handling all types of class action cases, including shareholder litigation. We represent institutional and individual investors, as well as private companies. We provide tailored solutions for our clients to achieve the best possible outcome.