The Complaint charges CPI with issuing materially false and misleading statements regarding the Company’s business and financial results and violating federal securities laws.
Naples, FL (PRWEB) January 19, 2012
The leading national securities law firm Gilman Law LLP today announced that a class action has been commenced in the United States District Court for the Eastern District of Missouri (Case No.: 4:12-cv-00075) alleging violations of federal securities laws on behalf of purchasers of the common stock of CPI Corp. (“CPI” or the “Company”) during the period between April 20, 2010 and December 21, 2011 (the “Class Period”).
CPI Corp. is a holding company engaged, through its wholly owned subsidiaries, in selling and manufacturing professional portrait photography of young children, individuals and families and other related products and services.
The Complaint charges CPI with issuing materially false and misleading statements regarding the Company’s business and financial results and violating federal securities laws. Specifically, plaintiff's allege that defendants concealed the following facts: (1) CPI’s business was performing much worse than defendants acknowledged and was deteriorating; (2) CPI’s initiatives to grow the business were not working as represented; (3) CPI’s stock was not a “good investment” and the Company’s stock buy-back was intended solely to project false confidence in the Company’s prospects; and (4) CPI’s cash flows would continue to deteriorate due to poor revenue growth.
On December 22, 2011, CPI announced results for the fiscal quarter ending November 12, 2011. CPI reported a net loss of ($7.25) million and that net sales declined 11% to $95.0 million, due in significant part to the Company’s comparable store sales declines. The results also meant that CPI had failed its leverage ratio test for its revolving credit facility. CPI subsequently obtained an amendment to its credit agreement. As a result, CPI will have to stop its dividend. On this news, CPI stock fell nearly 63%.
Investors who purchased or otherwise acquired the stock of CPI Corp. during the Class Period and either lost money on the transaction or still hold the shares, may contact the leading national securities law firm Gilman Law LLP by March 13, 2012 to discuss your rights to recovery of your losses or to obtain additional information. Investors who wish to join the CPI Corp. class action securities fraud lawsuit, should visit our investment losses website or call toll free at (888) 252-0048.
About Gilman Law LLP
The attorneys at the leading national securities law firm of Gilman Law have over 32 years of experience in securities litigation, class action securities cases, and have been involved in all major aspects of securities litigation. Gilman Law specializes in cases involving stock manipulation, securities fraud, investments fraud, shareholder rights violations, and securities arbitration.
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