SAN FRANCISCO--(BUSINESS WIRE)--
Hagens Berman Sobol Shapiro LLP an investor-rights law firm has opened a securities investigation against Ply Gem Holdings Inc. (PGEM) (“Ply Gem” or “the Company”) following allegations that the company knowingly distributed false and misleading information regarding its prospects while filing its IPO, and alerts investors of the July 18, 2014, deadline to file for lead plaintiff.
Investors who purchased PGEM stock between May 20, 2013 and May 19, 2014 (the “Class Period”) may contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling 510-725-3000, emailing PGEM@hbsslaw.com or visiting http://hb-securities.com/investigations/PGEM.
The complaint filed in the U.S. District Court for the Southern District of New York alleges that the manufacturer of exterior building products failed to disclose significant information regarding its business prospects, partnerships and labor force to potential investors.
At the time of the filing of this lawsuit, Ply Gem common shares traded in a range of $10.50 to $11 per share – 50 percent less than the IPO price.
According to the complaint, Ply Gem was aware of plans to buy back inventory from Home Depot due to a new supply agreement, yet failed to disclose this information until after filing for its IPO. On or about May 22, 2013, the SEC declared effective Ply Gem’s Registration Statement, as amended for the IPO, which omitted key facts about the company’s future operating results, including this agreement and its effects on Ply Gem’s business. The new supply agreement between Ply Gem and Home Depot involved the company returning a large volume of lower-priced, lower-margin product, according to the complaint.
In addition, the suit claims that Ply Gem withheld information regarding on-going “labor inefficiencies and other ramp-up costs,” associated with the new supply agreement – all of which was undisclosed during the IPO filing.
Ply Gem management also noted that April 2013 was a poor month for the company, stating, “…maybe it wasn’t our worst April in eight years, but it was our worst in a while.”
“Investors are only able to make sound financial decisions when all the facts are present, which is why it’s such a serious violation whenever a company chooses to blatantly ignore the SEC’s strict IPO filing guidelines,” said Kathrein. “In a situation such as this with Ply Gem, companies assume they can slip these issues of inventory, labor and operation costs under the rug, while leaving investors to fend for themselves in a risky investment.”
The complaint also states that high customer inventory at the end of the first quarter was adversely affecting the demand for and sales of Ply Gem’s siding products in April 2013 and May 2013.
The deadline to file for lead plaintiff in the securities fraud class action is July 18, 2014.
Persons with non-public information regarding PGEM should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 510-725-3000 or email PGEM@hbsslaw.com.
Hagens Berman Sobol Shapiro LLP is an investor-rights class-action law firm with offices in nine cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes can be found at www.hb-securities.com. Read the firm’s Securities Newsletter at http://www.hb-securities.com/newsletter. The firm’s blog is located at www.meaningfuldisclosure.com.
- Company Legal & Law Matters
- Hagens Berman Sobol Shapiro
Mark Firmani, 206-443-9357