Ulbricht v. Ternium S.A. et al 1:18-cv-06801-PKC-RLM — On November 29, 2018, investors sued Ternium S.A. (“Ternium” or the “Company”) in United States District Court, Eastern District of New York. The TX class action alleges that plaintiffs acquired Ternium securities at artificially inflated prices between May 1, 2014 and November 27, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the TX lawsuit, please contact us today.
Summary of the Allegations
Working through its subsidiaries, Ternium (NYSE: TX) makes and processes various steel products in Mexico, the United States, and throughout Central and South America.
Ternium now employs more than 21,000 people. Its steel products include but are not limited to slabs, billets and round bars, hot-rolled coils and sheets, bars and stirrups, wire rods, cold-rolled coils and sheets, tin plates, hot dipped galvanized and electrogalvanized sheets and pre-painted sheets.
Founded in 1961, the Company is incorporated and based in Luxembourg City, Luxembourg.
Summary of Facts
Ternium and four of its current and former officers and/or directors (the “Individual Defendants”) are now accused of deceiving investors by lying and/or withholding critical information about the Company’s business practices, operational and financial results during the Class Period.
Specifically, they are accused of omitting truthful information about certain conduct and its impact on the Company from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Ternium securities to trade at artificially inflated prices during the time in question.
The truth came out in a Bloomberg article published November 27, 2018. In it Bloomberg reported that the Chairman of Ternium’s Board of Directors, who is also chairman and CEO of Tenaris, S.A., had been “indicted for his role in a graft scheme.”
The article also went into greater detail, reporting: “The judge charged [Paolo] Rocca after the Argentine billionaire testified that one of his company’s executives paid an undisclosed amount of cash to government officials in monthly installments from 2009 to 2012. The officials were allegedly working for then-President Cristina Fernandez de Kirchner’s administration to speed up a compensation payment from Venezuela’s Hugo Chavez for the nationalization of Sidor, a unit that had been seized by Venezuela.”
A closer look…
As alleged in the November 29 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For instance, on a form filed with the SEC on April 30, 2014, the Company said in relevant part: “Ternium’s cash flows for 2011 and 2012 include non-recurring payments received in connection with the transfer of our interest in Sidor to Venezuela.”
On the same form, Ternium referred to its Code of Ethics and Code of Conduct, saying in relevant part: “We have adopted a code of ethics that applies specifically to our principal executive officers and principal financial and accounting officer and controller, as well as persons performing similar functions. We have also adopted a code of conduct that applies to all company employees, including contractors, subcontractors and suppliers.”
Another form filed with the SEC on June 1, 2015, included certifications signed by two of the Individual Defendants pursuant to federal law. By signing them, the Individual Defendants attested to “the accuracy of financial reporting, the disclosure of any material changes to the Company’s controls over financial reporting, and the disclosure of all fraud.”
Impact of the Alleged Fraud on Ternium’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is January 28, 2019. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Ternium securities using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.