The actions are brought against Monster and its officers for violations of the Securities Exchange Act of 1934. Monster markets and distributes energy drinks, fruit juices, smoothies, juice cocktails, iced teas, lemonades, and still water.
The complaints allege that, throughout the Class Period, defendants made materially false and misleading statements regarding Monster’s business, operational and compliance policies.
In particular, defendants misrepresented and failed to disclose that the company was improperly advertising, marketing and promoting its Monster Energy brand of energy drinks and that, as a result of the above, Monster’s financial statements were materially false and misleading at all relevant times.
On 8 August, after the market closed, the company disclosed financial results that failed to meet analysts’ expectations. On this news, Monster stock dropped $6.57 per share, or nearly 10%, to close at $61.20 per share on the following day.
On 9 August, after the market closed, the company disclosed that it had received a subpoena from a state attorney general in connection with an investigation concerning the company’s advertising, marketing, promotion, ingredients, usage and sale of its Monster Energy brand of energy drinks.
On this news, Monster stock dropped an additional $6.93 per share, or nearly 11%, to close at $54.27 per share on 10 August 2012.
Source: Lieff Cabraser Heimann & Bernstein
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