Signet Jewelers Limited (NYSE: SIG)
A class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Signet Jewelers Limited (NYSE: SIG) common stock between January 7, 2016 and June 3, 2016(the “Class Period”).
The complaint charges Signet and certain of its officers with violations of the Securities Exchange Act of 1934. Signet is purportedly the world’s largest retailer of diamond jewelry. The Company operates thousands of stores in North America and the United Kingdom through such well-known brand names as Kay, Jared, Zales and Peoples Jewellers.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects, including that: (i) the Company was experiencing difficulty ensuring the safety of customers’ jewelry while in the custody of Signet’s stores; (ii) employees at stores under at least one of Signet’s brands (Kay) were swapping customers’ stones for less valuable stones; (iii) the Company was experiencing a drop-off in customer confidence; and (iv) the Company was facing increasing competitive pressures and, as result, the Company’s financial performance was being negatively impacted. As a result of these false statements and/or omissions, Signet securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of $133.28 per share.
On May 25, 2016, BuzzFeed News reported that there were wide-spread occurrences of diamond swapping at Signet’s Kay stores. The report included stories of Kay customers whose diamonds were swapped out for much less expensive stones while the customers’ jewelry was in the custody of Kay, typically for repair. On May 26, 2016, Signet announced its first quarter 2017 financial results, which included same store sales growth below its previously issued first quarter 2017 guidance, and lowered its fiscal year 2017 same store sales growth guidance. On this news, the price of Signet stock fell $11.37 per share, or more than 10%, to close at $97 per share.
Then on June 3, 2016, the Company issued a statement wherein it confirmed the existence of instances of diamond swapping at its stores, though it denied that it was “systematic,” stating that “we strongly object to recent allegations on social media, republished and grossly amplified, that our team members systematically mishandle customers’ jewelry repairs or engage in ‘diamond swapping.’ Incidents of misconduct, which are exceedingly rare, are dealt with swiftly and appropriately.” On this news, the price of Signet stock fell $4.04 per share, or more than 4%, to close at $88.19 per share on June 3, 2016.
If you are a current shareholder and purchased stock between January 7, 2016 and June 3, 2016, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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