NEW YORK, Oct. 08, 2019 (GLOBE NEWSWIRE) -- Pomerantz LLP announces that a class action lawsuit has been filed against Altria Group, Inc. (“Altria” or the “Company”) (NYSE: MO) and certain of its officers. The class action, filed in United States District Court, for the Eastern District of New York, and indexed under 19-cv-05579, is on behalf of a class consisting of all persons and entities other than Defendants who purchased or otherwise acquired Altria securities between December 20, 2018 and September 24, 2019, both dates 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, against the Company and certain of its top officials.
If you are a shareholder who purchased Altria within the class period, you have until December 2, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at rswilloughby@pomlaw.com or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
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Altria, through its subsidiaries, manufactures and sells cigarettes, smokeless products, and wine in the United States. The Company sells its tobacco products primarily to wholesalers, including distributors; large retail organizations, such as chain stores; and the armed services.
On December 20, 2018, Altria issued a press release announcing that it had signed and closed a $12.8 billion investment in JUUL Labs, Inc. (“JUUL”), the purported U.S. leader in electronic vapor (colloquially called “e-vapor”) products, including e-cigarettes (the “December 2018 Press Release”). According to the December 2018 Press Release, the service agreements related to the transaction would accelerate JUUL’s mission to switch adult smokers to e-vapor products. Altria’s investment represented a 35% economic interest in JUUL, valuing the company at $38 billion, with JUUL purportedly remaining fully independent.
The complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Altria had conducted insufficient due diligence into JUUL prior to the Company’s $12.8 billion investment, or 35% stake, in JUUL; (ii) Altria consequently failed to inform investors, or account for, material risks associated with JUUL’s products and marketing practices, and the true value of JUUL and its products; (iii) all of the foregoing, as well as mounting public scrutiny, negative publicity, and governmental pressure on e-vapor products and JUUL made it reasonably likely that Altria’s investment in JUUL would have a material negative impact on the Company’s reputation and operations; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
Following Altria’s multi-billion dollar investment into JUUL, e-vapor products and JUUL increasingly became the subject of public and regulatory scrutiny throughout the country. Mounting skepticism, fear, and negative publicity in the media regarding e-cigarettes’ safety led to increased scrutiny by government authorities into vaping products, and municipalities throughout the country began tightening sales practices related to those products.
For example, on April 3, 2019, the U.S. Food and Drug Administration (“FDA”) announced its investigation into nearly three dozen cases of people suffering from seizures after “vaping” (the act of consuming e-vapor products through inhalation). Between 2010 and 2019, the FDA said it received thirty-five reports of people, especially children and young adults, experiencing seizures after using e-cigarettes.
On this news, Altria’s stock price fell $2.71 per share, or 4.78%, to close at $53.98 per share on April 3, 2019.
Then, on August 29, 2019, the Wall Street Journal reported that the U.S. Federal Trade Commission (“FTC”) was investigating whether JUUL used influencers and other marketing practices to appeal e-cigarettes to minors.
On this news, Altria’s stock price fell $1.60 per share, or 3.49%, to close at $44.25 per share on August 29, 2019.
Additionally, on August 30, 2019, both the FDA and the Centers for Disease Control and Prevention (“CDC”) announced that they were collaborating to investigate e-cigarette related cases of illnesses and “working tirelessly to investigate the distressing incidents of severe respiratory disease associated with use of e-cigarette products.”
On this news, Altria’s stock price fell an additional $0.51 per share, or 1.15%, to close at $43.74 per share on August 30, 2019—a total loss of $2.11 per share, or 4.6%, since closing at $45.85 per share two trading days earlier on August 28, 2019.
On September 11, 2019, news sources reported that the administration of U.S. President Donald Trump was preparing a ban on flavored e-cigarettes as federal agencies probed an outbreak of a lung problem that killed at least six people and reportedly led to the sickness of hundreds of others. President Trump and U.S. Health Secretary Alex Azar reportedly both confirmed that a ban is possible after the vaping issues are investigated.
On September 12, 2019, during after-market hours, Reuters reported that, “[w]ithin weeks, New Jersey could become the latest state to restrict e-cigarette use, with the governor on Thursday launching a task force to find ways to curb vaping, linked by U.S. health officials to hundreds of respiratory illnesses and a half-dozen deaths.” Additionally, that same day, the CDC reported that as of September 11, 2019, 380 confirmed cases, and probably cases of lung disease associated with vaping, had been reported by thirty-six states and the U.S. Virgin Islands, with six total deaths confirmed in six states.
On this news, Altria’s stock price fell $2.45 per share, or 5.51%, to close at $42.01 per share on September 13, 2019.
On September 23, 2019, during after-market hours, news sources began reporting that federal prosecutors in California were conducting a criminal probe into JUUL.
Finally, on September 25, 2019, Altria issued a press release announcing that Philip Morris had called off discussions of a $200 billion merger with Altria due to scrutiny of the vaping industry and the Company’s 35% stake in market leader JUUL, which had announced the same day that it was the subject of another federal investigation. JUUL also announced its CEO would step down and the firm would stop all advertising in the U.S.
On this news, Altria’s stock price fell an additional $0.17 per share, or 0.42%, to close at $40.56 per share on September 25, 2019—a total loss of $0.32 per share, or 0.78%, since closing at $40.88 per share two trading days earlier on September 23, 2019.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
CONTACT:
Robert S. Willoughby
Pomerantz LLP
rswilloughby@pomlaw.com
