Pomerantz LLP announces that a class action lawsuit has been filed
on behalf of Gerdau S.A. (“Gerdau” or the “Company”) (NYSE:GGB) and
certain of its officers. The class action, filed in
United States District Court, Southern District of New York, and
docketed under 16-cv-03925, is on behalf of a class consisting of
all persons or entities who purchased or otherwise acquired Gerdau
securities as American depositary receipts (“ADRs”) between June 2,
2011 and May 15, 2016, inclusive (the “Class Period”). This
class action seeks to recover damages against Defendants for
alleged violations of the federal securities laws under the
Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased Gerdau
securities during the Class Period, you have until July 25, 2016 to
ask the Court to appoint you as Lead Plaintiff for the class.
A copy of the Complaint can be obtained at www.pomerantzlaw.com.
To discuss this action, contact Robert S. Willoughby at
rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll
free, ext. 9980. Those who inquire by e-mail are encouraged to
include their mailing address, telephone number, and number of
shares purchased.
[Click here to join this class action]
Gerdau produces and commercializes steel
products worldwide. The Company operates through Brazil Business
Operation, North America Business Operation, South America Business
Operation, and Special Steel Business Operation segments.
The Complaint alleges that throughout the Class
Period, Defendants made materially false and misleading statements
regarding the Company’s business, operational and compliance
policies. Specifically, Defendants made false and/or misleading
statements and/or failed to disclose that: (i) the Company was
engaged in a bribery scheme in collusion with Brazil’s Board of Tax
Appeals (“CARF”); (ii) Gerdau had defrauded Brazilian tax
authorities of roughly $429 million in taxes; (iii) Gerdau’s Chief
Executive Officer (“CEO”), Defendant André Bier Gerdau Johannpeter
(“Johannpeter”) and other directors and employees of the Company
had engaged in bribery, money laundering, and influence peddling;
and (iv) as a result of the foregoing, Defendants’ statements about
Gerdau’s business, operations, and prospects were false and
misleading and/or lacked a reasonable basis.
On or about March 26, 2015, Brazilian
authorities announced that a Federal Police investigation, dubbed
Operation Zelotes, had uncovered a multibillion-dollar tax fraud
scheme at the Ministry of Finance (“Finance Ministry”), reporting
that as many as 70 companies had bribed members of the CARF, a body
within the Finance Ministry that hears appeals on tax disputes, to
obtain favorable rulings that recused or waived the amounts that
the companies owed. On or around March 29, 2015, it was
reported that Gerdau was among the companies under
investigation.
On December 4, 2015, the Brazilian publication
Jornal do Comércio reported that a report by a committee of the
National Congress of Brazil had named Gerdau, along with other
companies, as a beneficiary of a tax evasion scheme.
On this news, Gerdau’s ADR price fell $0.11, or
6.96%, to close at $1.47 on December 4, 2015.
On or around February 25, 2016, post-market,
Brazilian police raided Gerdau offices in connection with Operation
Zelotes, as police carried out some 20 court orders for testimony
and 18 search warrants in Recife, Porto Alegre, Rio de Janeiro, Sao
Pãulo, and Brasília. Gerdau’s CEO, Defendant Johannpeter, was
among the individuals ordered to testify by day’s end. In an
e-mailed statement, Gerdau stated that the Company had never
authorized the use of its name in illegal negotiations and that the
Company abided by rigorous ethical standards.
On this news, Gerdau’s ADR price fell $0.03, or
3.16%, to close at $0.92 on February 25, 2016.
On February 29, 2016, Gerdau announced that it
would delay the release of its fourth-quarter financial results as
the Company “analyze[d] the case records involving Gerdau in the
recent phase of [the] Zelotes Operation.”
On May 16, 2016, various news outlets reported
that Brazil’s federal police had accused Gerdau of evading $429
million in taxes and indicted a total of 19 Gerdau personnel,
including Defendant Johannpeter and some of the Company’s
executives, directors and lawyers, on corruption-related charges
including bribery, money laundering, and influence peddling.
On this news, Gerdau’s ADR price fell $0.13, or
over 7%, to close at $1.72 on May 16, 2016.
The Pomerantz Firm, with offices in New York,
Chicago, Florida, and Los Angeles, is acknowledged as one of the
premier firms in the areas of corporate, securities, and antitrust
class litigation. Founded by the late Abraham L. Pomerantz, known
as the dean of the class action bar, the Pomerantz Firm pioneered
the field of securities class actions. Today, more than 80 years
later, the Pomerantz Firm continues in the tradition he
established, fighting for the rights of the victims of securities
fraud, breaches of fiduciary duty, and corporate misconduct. The
Firm has recovered numerous multimillion-dollar damages awards on
behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
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