Class Action Suit Filed Against Tile Shop
New York, NY, Jan. 2, 2014 -- A class action lawsuit has been filed against Tile Shop Holdings for the allegedly overstating its earnings, leading to an inflation of its stock price.
Law firm Levi & Korsinsky in a press release said that it file the suit in the U.S. District Court for the Southern District of New York on behalf of investors who purchased Tile Shop Holdings, Inc. stock between Aug. 22, 2012 and Nov. 13, 2013.
The complaint alleges that the company made false and/or misleading statements and/or failed to disclose that it used an undisclosed related party in a scheme to overstate earnings.
The allegations surfaced in November when Gotham City Research LLC issued a report stating that the company had overstated its 2013 earnings by over 200%.
It also alleged that the company's largest supplier, Beijing Pingxiu, is an undisclosed related company secretly controlled by the brother-in-law of the company's CEO and a current Tile Shop employee, Fumitake Nishi.
On the news, Tile Shop stocks plummeted $8.27 per share to close at $12.95 per share.