NEW YORK, May 29, 2019 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed against A.O. Smith Corporation (“A.O. Smith” or the “Company”) (AOS) in the United States District Court for the Eastern District of Wisconsin on behalf of those who purchased or acquired the securities of A.O. Smith between July 26, 2016 through May 16, 2019, inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (i) A.O. Smith had undisclosed business connections and entanglements with Jiangsu UTP Supply Chain (“UTP”) through which it funneled up to 75% of its China product sales; (ii) A.O. Smith had used UTP to engage in channel stuffing by artificially inflating inventories purportedly sold through distributors that were not based on consumer demand, thereby approximately doubling the normal level of inventory at such distributors; (iii) A.O. Smith had used its UTP relationship to artificially inflate the sales figures it reported to investors by as much as 8% and to conceal worsening sales trends that A.O. Smith was experiencing in China; (iv) A.O. Smith’s sales growth had been primarily in lower margin products as its higher priced products were being undercut by competition in “second-tier” Chinese cities, causing the Company to experience significant market pressures; (v) A.O. Smith had increased its cash reserves in China to over $530 million in furtherance of its channel stuffing and sales manipulation scheme, encumbering A.O. Smith’s ability to repatriate the cash for use for capital expenditures; and (vi) as a result, A.O. Smith’s public statements were materially false and misleading at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
Investors who purchased or otherwise acquired shares during the Class Period should contact the Firm prior to the July 29, 2019 lead plaintiff motion deadline. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at firstname.lastname@example.org or email@example.com.
Please visit our website at http://www.gme-law.com for more information about the firm.