Robbins Arroyo LLP: Gerdau S.A. (GGB) Misled Shareholders According to a Recently Filed Class Action
June 02 2016 - 6:22PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
class action complaint was filed against Gerdau S.A. (NYSE: GGB) in
the U.S. District Court for the Southern District of New York. The
complaint is brought on behalf of all purchasers of Gerdau American
depositary receipts ("ADRs") between June 2, 2011 and May 15, 2016,
for alleged violations of the Securities Exchange Act of 1934 by
Gerdau's officers and directors. Gerdau produces and commercializes
steel products worldwide.
View this information on the law firm's Shareholder Rights
Blog:www.robbinsarroyo.com/shareholders-rights-blog/gerdau-s-a
Gerdau Accused of Engaging in Bribery and Money
Laundering
According to the complaint, throughout the class period, Gerdau
submitted multiple filings with the U.S. Securities and Exchange
Commission stating that the financial information was accurate and
disclosed any material changes to the company's internal controls
over financial reporting. However, the complaint alleges that
Gerdau officials failed to disclose adverse facts about the
company's business, operations, and prospects, including that: (i)
the company was engaged in a bribery scheme in collusion with
Brazil's Board of Tax Appeals ("CARF"), a body within the Ministry
of Finance that hears appeals on tax disputes; (ii) Gerdau had
defrauded Brazilian tax authorities of roughly $429 million in
taxes; and (iii) Gerdau's Chief Executive Officer and other
executives, directors, and employees of the company engaged in
bribery, money laundering, and influence peddling.
On March 26, 2015, Brazilian authorities announced that a
federal police investigation had uncovered a multibillion-dollar
tax fraud scheme at the Ministry of Finance, reporting that as many
as 70 companies had bribed members of the CARF to obtain favorable
rulings that recused or waived the amounts the companies owed. On
March 29, 2015, it was reported that Gerdau was among the companies
under investigation. Then, on February 25, 2016, Brazilian police
raided Gerdau offices, carrying out 20 court orders for testimony
and 18 search warrants. On February 29, 2016, Gerdau announced that
it would delay the release of its fourth quarter financial results
as the company analyzed the case records involving Gerdau in the
recent phase of the investigation. 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 on corruption related charges. On this news, Gerdau's ADR
price fell $0.13, or over 7%, to close at $1.72 on May 16,
2016.
Gerdau Shareholders Have Legal Options
Concerned shareholders who would like more information about
their rights and potential remedies can contact attorney Darnell R.
Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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version on businesswire.com: http://www.businesswire.com/news/home/20160602006659/en/
Robbins Arroyo LLPDarnell R. Donahue619-525-3990 or Toll Free
800-350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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