CaesarStone manufactures and sells engineered quartz slabs which are used for kitchen countertops, vanity tops, and backsplashes, as well as in other applications.
Shareholders allege that CaesarStone failed to disclose a series of negative news developments and in fact deliberately kept the news from them.
What investors are part of this class action? The class is currently defined as all purchasers of CaesarStone securities between March 25, 2013 and August 18, 2015, inclusive (the “Class Period”). CaesarStone is based in Israel, and its shares trade on NASDAQ under the ticker symbol “CSTE”.
The lawsuit alleges that during the Class Period, CaesarStone made false or misleading statements and failed to disclose important negative facts, including the following:
- That the cost of quartz rose by approximately 20% in 2014, while the company claimed the impact on it was just 4%.
- That lab tests showed that CaesarStone’s samples contained less quartz than advertised.
- That CaesarStone overstated its consolidated margins, gross margins, and EBITDA.
- That CaesarStone has had a growing number of lawsuits filed against it, involving approximately 60 silicosis-related injuries or deaths among its workers and fabricators in Israel, and that Caesarstone did not disclose the extent of and risks posed by these lawsuits.
- That recent OSHA warnings about silicosis may have an impact on the opening and costs of a new US facility.
- That recent audit reports have revealed audit deficiencies related to revenue and inventory controls.
The above points appeared in an August 19, 2015 report by analyst firm Spruce Point Capital Management. When this information was published, CaesarStone by $3.68 or 7.6%. (ADRs function similarly to shares; they represent a simplified means for Americans to own shares in foreign companies.)
The class action claims that because of these points, CaesarStone’s statements about its business, operations, and prospects were false and misleading.
Procedural Status: The lawsuit was filed on August 25, 2015 and is captioned Tapia-Matos v. CaesarStone Sdot-Yam Ltd. et al. It was filed in the New York Southern District Court. Its civil docket number is 1:15cv06726. The lead plaintiff deadline is October 26, 2015. "
Article Type: Lawsuit