And now the lawsuits… Oatly hit with shareholder class actions following short seller report, such suits becoming more common, says attorney


Glenn K. Vanzura, co-head of Mayer Brown’s securities litigation and enforcement practice, was speaking to FoodNavigator-USA after Oatly was targeted in several proposed class action lawsuits* (see box below) on behalf of shareholders who claim they paid over the odds for Oatly American Depository Shares following its recent IPO.

The lawsuits were filed shortly after shares in Oatly dropped sharply in mid-July following a lengthy report from activist investor and short seller Spruce Point Capital Management​ alleging Oatly omitted and manipulated facts in its prospectus and in an investor presentation last month and “will never achieve profitability.” 

‘The short-seller/shareholder class action plaintiff model that we have seen play out in other industries has now come to the food industry’

Oatly has denied the allegations in a blanket fashion and noted Spruce has a vested interest in lowering Oatly’s share price (it’s a short seller), but has not responded individually to the allegations in the report, and told us it is not commenting on this lawsuit.

Vanzura added: “The short-seller/shareholder class action plaintiff model that we have seen play out in other industries has now come to the food industry, so look for other such schemes launched against other publicly traded food industry companies.”

In federal cases such as this one, he said, the complaint must conform with the Private Securities Litigation Reform Act (PSLRA) of 1995, a statute that sets heightened standards for shareholder class action plaintiffs to plead and prove their claims. 

“Because the standards are so high for such complaints, it is quite common for the suit to be dismissed for failure to plead one or more of the elements of the claim.  If the complaint is ultimately dismissed with prejudice, then the defendants will never have to ‘disprove’ the allegations against them in the case.  This stage of the case can take a year, and sometimes much more than a year.”



Source link

We will be happy to hear your thoughts

Leave a reply

MINAVIT
Logo
Enable registration in settings - general
Compare items
  • Total (0)
Compare
0
Shopping cart