Frankfurt-Trust Investment Luxemburg AG v. United Technologies Corporation

Updated: May 12, 2017

Status: Newly Filed Case

On May 12, 2017, Labaton Sucharow filed a securities class action lawsuit on behalf of its client Frankfurt-Trust Investment Luxemburg AG (FT Lux) against United Technologies Corporation (United Technologies) (NYSE: UTX), and certain of its senior executives (collectively, the defendants). The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (Exchange Act), and U.S. Securities and Exchange Commission (SEC) Rule 10b-5 promulgated thereunder, on behalf of all person or entities who purchased or otherwise acquired the publicly traded securities of United Technologies between April 21, 2015 and July 20, 2015, inclusive (the class period).

United Technologies is manufacturer and servicer of high-technology products, including aircraft components, elevators, escalators, air-conditioning units, and military-missile systems. The complaint alleges that during the class period, the defendants violated provisions of the Exchange Act by issuing and reaffirming unfounded and inflated earnings guidance, primarily based on the planning assumptions in two of the company’s key business units: UTC Aerospace Systems (UTAS) and Otis Elevator Co. (Otis). The defendants’ class period representations were materially false and misleading because the defendants failed to disclose or indicate that United Technologies’ earnings forecast relied on planning assumptions for the UTAS and Otis units that were not fully scrutinized and were far too aggressive.

On July 21, 2015, the company cut its 2015 earnings guidance on the basis of weak performance by the UTAS and Otis units. In reaction to these revelations, UTX stock lost hundreds of millions of dollars in market capitalization, with the Company’s stock price falling from a class period high of $119.14 per share on May 14, 2015, to close at $102.71 per share on July 21, 2015.

Case Materials