Updated: March 19, 2019
Status: Ongoing Case
Labaton Sucharow serves as additional counsel in this securities class action lawsuit against Lexmark International, Inc. (Lexmark) and certain of the company’s senior executives. The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule l0b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired the publicly traded securities of Lexmark between August 1, 2014 and July 20, 2015, both dates inclusive (the class period).
Lexmark is a manufacturer of printers and related supplies, primarily ink cartridges. The company sells its products to wholesale distributors and large retail chains in more than 90 countries around the world. Based on its 2014 financial results, 37 percent of Lexmark’s total revenues were generated within its Europe, Middle East, and Africa (EMEA) segment. Supplies sales in Europe are especially critical to the EMEA segment.
Throughout the class period, Lexmark made false and misleading statements regarding its end-user demand, channel inventory, and growth prospects for its high-margin supplies business. The company also failed to disclose deterioration in end-user demand and excessive inventory levels at its European wholesale distributors. Lexmark ultimately acknowledged that its supplies growth was not attributable to end-user demand but rather the result of its European customers buying ahead of customary price increases, which produced excessive inventory.
The Second Amended Class Action Complaint was filed on February 15, 2018. On March 19, 2019 the court dismissed the defendants' motion to dismiss.