Updated: January 16, 2020
Status: Ongoing Case
Flex Ltd. is a multinational technological manufacturer. The action alleges that defendants made misstatements and/or omissions concerning Flex’s management and execution of customer contracts, including that (1) the Company’s internal controls over financial reporting, including those related to customer contracts, were adequate and proper, and (2) the allegedly most crucial contract in the Company’s pipeline, a contract with Nike to automate sneaker manufacturing, was repeatedly hitting key milestones towards profitability.
From January 26, 2017, through October 25, 2018, (the “Class Period”), Defendants failed to disclose or warn the market that the Company’s contract with Nike was failing operationally and was not commercially viable. Further, the Company failed to disclose material weaknesses in its internal controls over financial reporting regarding its customer contracts.
On the last day of the Class Period, Flex announced that the Nike contract was terminated, and the Company’s CEO abruptly retired. As a result of Defendants’ misstatements and omissions, Flex’s stock lost half its value, falling from $15.29 per share on January 26, 2017, to $7.09 per share on October 26, 2018.
The case is captioned Kipling v. Flex Ltd., No. 5:18-cv-02706 (N.D. Cal.). Labaton Sucharow serves as sole lead counsel representing lead plaintiff National Elevator Industry Pension Fund and the class.
Lead plaintiff filed its consolidated complaint on November 8, 2019. Defendants’ motion to dismiss was fully briefed as of January 9, 2020. No date for oral argument has been set. The Court’s decision is pending.