Last updated on October 30th, 2024
Rosen Law Firm, a global investor rights law firm with a focus on securities class actions and shareholder derivative litigation, has filed a class-action lawsuit on behalf of purchasers of Costco securities from June 6, 2018, through Oct. 25, 2018. The lawsuit seeks to recover damages for Costco investors under the federal securities laws.
The lawsuit claims defendants made false or misleading statements or failed to disclose that Costco lacked effective internal control over financial reporting and that as a result, defendants’ statements about Costco’s business, operations and prospects were false and misleading or lacked a reasonable basis. According to the suit, when the true details entered the market, investors suffered damages.
On Oct. 4, 2018, Costco issued a press release announcing its financial and operating results for the fiscal fourth quarter and year ended Sept. 2, 2018. In the press release, Costco stated, in part, that “it expects to report a material weakness in internal control,” specifically relating “to general information technology controls in the areas of user access and program change-management over certain information technology systems that support the Company’s financial reporting processes.”
Following this news, Costco’s stock price fell $12.86 per share, or roughly 5.55 percent, to close at $218.82 per share on Oct. 5, 2018.
Then, on Oct. 26, 2018, Costco filed its annual report for the fiscal fourth quarter and year ended Sept. 2, 2018, which reported that the company had identified a material weakness as described in its Oct. 4 press release. Costco’s stock price fell $8.21 per share, or roughly 3.63 percent, to close at $218.90 per share following this news.
The lawsuit has been filed but has not yet been certified. Rosen currently is seeking lead plaintiffs, who have until Jan. 7 to move the Court.
Rosen joins a number of other law firms filing class action suits against Costco on behalf of its investors, including the Klein Law Firm; Bragar Eagel & Squire P.C.; Pomerantz LLP; and Bronstein, Gewirtz & Grossman LLC.
Headquartered in Issaquah, Washington, Costco operates membership-only warehouse clubs in the U.S. and internationally.
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