Hall v. Rent-A-Center, Inc.
Status: Ongoing Case
On March 16, 2017, Labaton Sucharow was appointed lead counsel in a securities class action against Rent-A-Center, Inc., its former CEO Robert D. Davis, and former CFO Guy J. Constant. Rent-A-Center owns and operates more than 3,000 stores across North America that, according to the company’s website, offer customers the ability to purchase furniture, electronics and computers through rental purchase agreements “without needing access to credit.”
The plaintiffs allege that during the period from February 2, 2015 through October 11, 2016, inclusive (the class period), the defendants made material misstatements and omissions in violation of the federal securities laws concerning, among other things, the risks and benefits of a new point-of-sale (POS) system that Rent-A-Center began implementing in early 2015. Contrary to numerous positive representations made by the defendants about Rent-A-Center’s new Point of Sale (POS) System which was designed to manage sales, inventory, collections, customer relationship management, and payment tracking, the development, testing, and implementation of the POS System in the company’s stores was marred by serious and continuous problems and performance outages of extended length. When the defendants finally disclosed the negative impact the implementation of the POS System had on the company’s sales, revenue, and collection efforts, Rent-A-Center’s share price dropped nearly 30 percent in one day. The plaintiffs allege that the foregoing, as well as other material misstatements and omissions made by the defendants, caused the company’s investors to suffer losses.
On December 14, 2017, the court adopted the Amended Report and Recommendation of the Magistrate Judge denying defendants’ motion to dismiss. In the order, the court stated that the allegations from the confidential witnesses (CWs) “make a strong inference of scienter, especially when viewed in the aggregate with certain other scienter allegations.” Order, at 24. The complaint specifically identifies “the names of documents and meetings, the contents of such documents and meetings, the frequency and attendees of the meetings or the frequency and distribution of reports. The CWs link the reports and meetings to the Individual Defendants.” Order, at 23-24.
The case is Hall v. Rent-A-Center, Inc., No. 16-cv-0978 (E.D. Tex.). Labaton Sucharow represents lead plaintiff Oklahoma Firefighters Pension and Retirement System, named plaintiff City of Hollywood Employees’ Retirement Fund, and the proposed class.