Urban Outfitters Executives Under Investigation
Shareholder rights law firm Schubert Jonckheer & Kolbe LLP (the “Schubert firm”) is investigating whether certain officers and directors of Urban Outfitters, Inc. (NASDAQ: URBN) breached their fiduciary duties to Urban Outfitters and its shareholders by engaging in allegedly improper insider sales and/or misrepresenting information related to slowing sales growth at Urban Outfitters brand stores during the period March 12, 2013 through September 9, 2013 (the "Class Period").
In November 2013, a class action was filed in the United States District Court for the Eastern District of Pennsylvania, alleging that various Urban Outfitters' officers, including CEO Richard Hayne and CFO Frank Conforti, engaged in allegedly improper insider sales of Urban Outfitters stock and made numerous false and misleading statements regarding sales trends during the Class Period.
On May 4, 2015, the class action complaint was upheld over defendants’ motion to dismiss. In denying the motion to dismiss, the District Court wrote:
[P]laintiff alleges that … Hayne sold around 1.2 million shares of common stock in Urban, for a total profit over $50 million.... Plaintiff alleges that Hayne’s stock sales were unusual in time and amount, because Hayne had not sold any shares during the 18 months prior to the Class Period.... Plaintiff also alleges the amount of profit from Hayne’s stock sales was likely excessive compared to Hayne’s ordinary compensation. Conforti sold a total of 27,000 shares of common stock.... The stocks sold by Conforti are valued at over $1.1 million and amounted to more than 99% of his holdings.... Similarly to Hayne, Conforti had not sold any of his shares in Urban during the 18 months preceding the Class Period.... Moreover, plaintiff alleges specific facts which suggest motive and opportunity on the part of Conforti. Not only did Conforti sell 99% of his holdings during the Class Period, but the timing of his sale of 22,000 shares on September 3, 2013 is particularly suspicious. A week after Conforti’s sale, Urban made an announcement concerning the third quarter sales growth, which disappointed the market and resulted in a price drop in Urban stock....
If you currently own Urban Outfitters stock and wish to obtain additional information about the investigation and your legal rights, please fill out our form (at right) or contact Miranda Kolbe either via email at mkolbe@schubertlawfirm.com or by phone at 415-788-4220.
