1 1 1 1 MARTIN H. SIEGEL, on his own behalf and on behalf of all others similarly situated, UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA Plaintiff, SKECHERS USA INC., ROBERT GREENBERG, MICHAEL GREENBERG JEFFREY GREENBERG, DAVID WEINBERG, and PHILIP PACCIONE, v. Defendants. Case No. CLASS ACTION COMPLAINT FOR BREACH OF FIDUCIARY DUTY AND VIOLATIONS OF FEDERAL SECURITIES LAWS Jury Trial Demanded Plaintiff, Martin H. Siegel, alleges, by his undersigned attorneys, alleges, upon information and belief (said information and belief being based, in part, upon the investigation conducted by and through his counsel), except with respect to paragraph, which is alleged upon personal knowledge, as follows:. NATURE OF THE ACTION 1. This is a securities fraud class action brought by the Plaintiff on behalf of investors in the publicly traded securities of Skechers USA Inc., (NYSE: SKX), between April, 0 and December, 0, inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of federal securities laws and pursue remedies under the Securities Exchange Act of (the "Exchange Act").. During the Class Period, the defendants issued and/or failed to correct false and misleading financial statements and press releases concerning the Company's publicly reported revenues and earnings directed to the investing public.
1 1 1 1 JURISDICTION AND VENUE. (a) The claims asserted herein arise under and pursuant to Sections (b) and (a) of the Exchange Act, (1 U.S.C. j(b) and t(a)), and Rule b- promulgated thereunder ( C.F.R. 0.b-). (b) This Court has jurisdiction over the subject matter of this action pursuant to of the Exchange Act (1 U.S.C. aa) and U.S.C... Venue is proper in this Judicial District pursuant to of the Exchange Act, 1 U.S.C. aa and U.S.C. 11(b). Many of the acts and transactions alleged herein, including the preparation and dissemination of materially false and misleading information, occurred in substantial part in this District. Additionally, the Company maintains its principal executive offices in this Judicial District.. In connection with the acts, conduct and other wrongs alleged in this complaint, defendants, directly or indirectly, used the means and instrumentalities of interstate commerce, including but not limited to, the United States mails, interstate telephone communications and the facilities of the national securities exchange. THE PARTIES. Plaintiff, Martin H. Siegel, purchased Skecher securities, as set forth in the accompanying certification attached hereto and incorporated herein by reference, and have suffered damages as a result of the wrongful acts of defendants as alleged herein.. Defendant Skechers USA, Inc., is a Delaware corporation with its principal executive offices located at Manhattan Beach Blvd, Manhattan Beach, California 0. Skechers designs and markets branded contemporary casual, active, rugged and lifestyle footwear for men, women and children in over 0 countries. Skechers also sells its products internationally through distributors and directly to consumers through its own retail stores.
1 1 1 1. Defendant, Robert Greenberg ("R. Greenberg"), has served as the Chairman of the Board and Chief Executive Officer of the Company since October.. Defendant, Michael Greenberg ("M. Greenberg"), has served as the President and a member of the Board of Directors of the Company since the Company's inception.. Defendant, Jeffrey Greenberg ("J. Greenberg"), has served as a member of the Board of Directors of the Company since September 00 and Vice President of Electronic Media of the Company since January.. Defendant, David Weinberg ("Weinberg"), has served as Chief Financial Officer of the Company since October and Executive Vice President and a member of the Board of Directors since July. 1. Defendant, Philip G. Paccione ("Paccione"), has served as Executive Vice President, Business Affairs since February 00, Corporate Secretary since July, and General Counsel of the Company since May. 1. The individuals named as defendants in -1 are collectively referred to hereafter as the "Individual Defendants." During the Class Period, each of the Individual Defendants made various statements regarding the Company's financial results and condition in Skechers' press releases, SEC filings and other public disclosures. 1. During the Class Period, each of the Individual Defendants, as senior executive officers and/or directors of Skechers, were privy to non-public information concerning its business, finances, products, markets and present and future business prospects via access to internal corporate documents, conversations and connections with other corporate officers and employees, attendance at management and Board of Directors meetings and committees thereof and via reports and other information provided to them in connection therewith. Because of their
1 1 1 1 possession of such information, the Individual Defendants knew or recklessly disregarded the fact that adverse facts specified herein had not been disclosed to, and were being concealed from, the investing public. 1. Each of the Individual Defendants are liable as a direct participant with respect to the wrongs complained of herein. In addition, the Individual Defendants, by reason of their status as senior executive officers and directors were each a "controlling person" within the meaning of Section of the Exchange Act and had the power and influence to cause the Company to engage in the unlawful conduct complained of herein. Because of their position of control, the Individual Defendants were able to and did, directly or indirectly, control the conduct of Skecher's business.. The Individual Defendants, because of their positions with the Company, were provided with copies of the Company's reports and press releases alleged herein to be misleading, prior to or shortly after their issuance and had the ability and opportunity to prevent their issuance or cause them to be corrected. Thus, the Individual Defendants had the opportunity to commit the fraudulent acts alleged herein.. Individual Defendants are liable, jointly and severally, as direct participants in and co-conspirators of, the wrongs complained of herein. CLASS ACTION ALLEGATIONS. Plaintiff brings this action as a federal class action pursuant to Federal Rules of Civil Procedure (a) and (b)() on behalf of a class (the "Class"), consisting of all those who purchased the securities of Skechers between April, 0 to December, 0, inclusive, (the "Class Period") and who were damaged thereby. Excluded from the Class are defendants, the officers and directors of the Company, members of their immediate families and their legal representatives, heirs, successors or assigns and any entity in which defendants have or had a controlling interest.
1 1 1 1. The members of the Class are so numerous that joinder of all members is impracticable. Throughout the Class Period, Skecher securities were actively traded on the New York Stock Exchange ("NYSE"). Skecher's stated in its latest -Q SEC filing on November 1, 0, that the Company has over million common shares outstanding. While the exact number of Class members is unknown to Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes that there are hundreds or thousands of members in the proposed Class.. Plaintiffs' claims are typical of the claims of the members of the Class, because plaintiffs and all of the Class members sustained damages arising out of defendants' wrongful conduct complained of herein.. Plaintiff will fairly and adequately protect the interests of the Class members and have retained counsel who are experienced and competent in class actions and securities litigation.. A Class Action is superior to all other available methods for the fair and efficient adjudication of this controversy, since joinder of all members is impracticable. Furthermore, as the damages suffered by individual members of the Class may be relatively small, the expense and burden of individual litigation make it impossible for the members of the Class to individually redress the wrongs done to them. There will be no difficulty in the management of this action as a class action.. Questions of law and fact common to the members of the Class predominate over any questions that may affect only individual members, in that defendants have acted on grounds generally applicable to the entire Class. Among the questions of law and fact common to the Class are:
1 1 1 1 (a) Whether the federal securities laws were violated by Defendants' acts and omissions as alleged herein; (b) Whether the Company's publicly disseminated press releases and statements during the Class Period omitted and/or misrepresented material facts regarding the financial condition of Skechers; (c) Whether defendants breached any duty to convey material facts or to correct material acts previously disseminated; (d) Whether defendants participated in and pursued the fraudulent scheme or course of business complained of; (e) Whether the defendants acted willfully, with knowledge or recklessly, in omitting and/or misrepresenting material facts; (f) Whether the market prices of the Skecher's securities during the Class Period were artificially inflated due to material nondisclosures and/or misrepresentations complained of herein; and (g) Whether the members of the Class have sustained damages and, if so, what is the appropriate measure of damages. SUBSTANTIVE ALLEGATIONS Background Facts Regarding the Company. Skechers U.S.A., Inc. designs and markets a collection of contemporary footwear for men, women and children under the Skechers brand. The Company's shoes are sold through a wide range of department stores and specialty stores, a network of its own retail stores and the Skechers c-commerce Website. The Company's product line consists of over 1,00 active styles that are organized in seven distinct collections: namely Skechers USA, Skechers Sport, Skechers
1 1 1 1 Collection, Skechers Kids, Somethin' Else from Skechers, Skechers by Michelle K and Wheelers by Skechers.. Beginning in 0, Skechers began assuming the role of distributor of its products in several international markets such as Spain, Italy, Portugal, the Benelux region, and Austria. Once unencumbered by a third party distributor, Skechers was able to increase their profit margin on sales without moving any additional inventory.. Yet, this benefit was short-lived. While temporarily enjoying increased profits by reaping greater margins on sales, Skechers' overall merchandise sales ultimately began to slow and Skechers was forced to significantly reduce earnings accordingly. The market, unprepared for the temporary effect this role of distributor would have on earnings, was stunned once the Company, having recorded record revenue in the first and second quarter of 0, began revising earnings and ultimately recorded a loss.. Even more alarming, while Skechers stock was soaring as a result of the market's favorable reaction to its increased profits, the Individual Defendants, knowing the truth about the Company's long-term outlook, sold off considerable personal holdings in the Company and reaped more than $ million profit from stock sales during the Class Period. Materially False and Misleading Statements Made During the Class Period. The Class Period commences on April, 0. On that day, the Company issued a press release announcing that fiscal first quarter 0 earnings should exceed First Call consensus estimates of $0. by at least %, and that the Company also expected to report first quarter 0 sales in excess of $ million.
1 1 1 1. On April, 0, the Company announced in a press release that net sales for the first quarter of 0 rose.% to $. million as compared to $. million in the first quarter of the prior year. Defendant M. Greenberg, commented on the results: We believe our ability to exceed analysts' expectations and report record earnings results in a challenging retail environment is a testament to the strength of the SKECHERS brand worldwide, the diversification of our business and our inventive, memorable and cool advertising campaigns, as well as our ongoing commitment to achieve efficient operations. Our strong bottom line growth during the quarter was fueled in part by expense control and improvements in our inventory management. We were pleased to be able to achieve improved profitability while forging significant growth overseas and preserving our leadership position in the domestic market. Regarding inventory the Company stated: Inventory at quarter end was on plan at $1.1 million, representing a reduction of $. million from year-end 01 and a.% increase over March 1, 01 inventory of $.1 million. 0. The Company filed a Form -Q with the SEC for the fiscal first quarter on May 1, 0. The filing reiterated the financial results released by the Company in the April, 0 press release detailed above. More specifically, the filing attributed the increased earnings to an increase in international distribution - a function Skechers was now performing: The increase in net sales was primarily due to increased sales in our international wholesale and domestic and international retail distribution channels. 1. The market reacted favorably to the information published by the company in the April, 0 and April, 0 press releases and the May 1, 0, SEC filing. The stock price rose by 1% over this period, from a closing price of $.1 per share on April, 0 (one day before the class period), to a close of $.1 per share on May 1, 0.. While the stock price soared, several of the Individual Defendants liquidated their personal holdings of Skechers stock.
1 1 1 1. On July, 0, the Company announced in a press release that fiscal second quarter 0 net earnings rose.% to $. million, as compared to net earnings of $. million in the second quarter of the prior year. Regarding inventory the Company stated: Inventory at quarter end was current and on plan at $1.0 million, representing a reduction of. percent from June 0, 01 inventory of $1.0 million.. The above paragraphs -1, were false and misleading because they failed to accurately inform the marketplace that the Company's record sales were tenuously propped by the increased margins that the Company recorded by assuming the role as distributor, rather than any increase demand for Skechers products.. On September, 0, the Company announced in a press release, that it would revise previous guidance given for the fiscal third quarter of 0. The Company estimated third quarter diluted earnings per share in the range of $0.0 - $0., as compared to $0.0 in the third quarter of the prior year and versus the current third quarter First Call consensus estimate of $0.1. The press release stated in part: We attribute the revision in our third quarter estimates to the generally weak domestic retail sales environment within the apparel and footwear sectors, began Michael Greenberg, president of SKECHERS USA. Given the soft back-to-school season, our August sales were below our original expectations, as we did not generate the reorder volume that we had initially expected when we began the quarter. On a positive note, we continued as a top performer with our major domestic accounts, maintained clean inventory levels and our spring 0 product lines were received well during pre-line meetings and at the World Shoe Association trade show held in August. In addition, sales within our international and company-owned retail divisions are running ahead of expectations.. Significantly, the press release still forecasted a profit for the fourth quarter: For the fourth quarter of 0, the Company indicated that it currently estimates revenues to be even with the fourth quarter of
1 1 1 1 01 and diluted earnings per share to range between $0. and $0.1, as compared to the current First Call consensus fourth quarter estimate of $0.. In the fourth quarter of 01, the Company reported sales and diluted earnings per share of $.1 million and $0.0, respectively. Michael Greenberg continued: Based on our expectation that weakness in the domestic retail environment will continue into the holiday season, we are conservatively estimating flat fourth quarter sales and when combined with a relatively fixed expense base, should bring about more moderate earnings growth. While the current environment remains challenging, we believe that the constant evolution in our product and distribution strategies, as well as our unique ability to interpret footwear trends at affordable price points positions us for long-term sales and earnings growth. These strategies are supported by our expanded infrastructure and increased financial flexibility stemming from the convertible debt offering we completed in April of this year, as well as our cost containment and inventory management policies.. By the September, 0 press release, the Individual Defendants had liquidated millions of shares in their personal holdings and had already recognized millions of dollars in profits. THE TRUTH EMERGES. Subsequently, in a December, 0 press release, the Company again revised its previously reported earnings forecast and announced that the Company expected fiscal fourth quarter revenues to be in the range of $0.0 million to $0.0, versus the previous guided range of $ million to $ million. Moreover, the Company now estimated reporting a fourth quarter loss per share in the range of $0. to $0., as compared to the First Call consensus diluted earnings of $0.0 per share. Regarding inventory, the Company stated: Additionally, our international distributor sales were lower than anticipated as a result of unstable economic and political conditions in certain countries.
1 1 1 1. This disclosure had a dramatic effect on the market as the price of the Company's common stock dropped from a closing price of $1.0 per share on December, 0, to a closing price of $.0 per share on December, 0. The drop in price represented almost a % loss in value on trading of,,00 million shares, the highest amount of trading in the class period and 1.% of the total shares outstanding. 0. Since the Company's December, 0 announcement, Analyst Mitch Kummetz, of Wedbush Morgan Securities noted in his report on February, 0: During Fiscal Year 0, Skechers began direct selling in several countries where previously they had used distributors, including Spain, Italy, Portugal, the Benelux region, and Austria. In January, the company announced that they had taken over direct sales in Canada as well. While strategically, this may make sense for the company, it has the effect of artificially boosting sales over those periods in which the distributor's margin is picked up. UNDISCLOSED ADVERSE INFORMATION 1. The market for Skechers securities was open, well-developed and efficient at all relevant times during the class period. As a result of these materially false and misleading statements and failures to disclose, the Company's securities traded at artificially inflated prices during the Class Period. The artificial inflation continued until the time Skechers admitted that its growth was slowing and these admissions were communicated to, and/or digested by, the securities markets. Plaintiffs and other members of the Class purchased or otherwise acquired Skechers securities relying upon the integrity of the market price of Skechers common stock and market information relating to Skechers, and have been damaged thereby.. During the Class Period, defendants materially misled the investing public, thereby inflating the price of Skechers securities, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make defendants' statements, as set forth herein,
1 1 1 1 not false and misleading. Said statements and omissions were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about the Company, its business and operations, including, inter alia: (a) (b) Throughout the Class Period each defendant knew or recklessly disregarded that Skechers true earnings were not as represented in those reports, releases and financial statements and these statements were made by defendants in order to maintain the appearance of prospering performance and favorable financial results; and As a result of these false and misleading statements the Company's shares were traded at artificially inflated prices, causing damage to the plaintiff and the other members of the Class.. At all relevant times, the material misrepresentations and omissions particularized in this Complaint directly or proximately caused or were a substantial contributing cause of the damages sustained by plaintiff and other members of the Class. As described herein, during the Class Period, defendants made or caused to be made a series of materially false or misleading statements about Skechers' business, prospects and operations. These material misstatements and omissions had the cause and effect of creating in the market an unrealistically positive assessment of Skechers and its business, prospects and operations, thus causing the Company's common stock to be overvalued and artificially inflated at all relevant times. Defendants' materially false and misleading statements during the Class Period resulted in plaintiff and other members of the Class purchasing the Company's common stock at artificially inflated prices, thus causing the damages complained of herein. SCIENTER ALLEGATIONS. As alleged herein, defendants acted with scienter in that defendants knew that the public documents and statements, issued or disseminated by or in the name of the Company were materially false and misleading; knew or recklessly disregarded that such statements or documents would be issued or disseminated to the investing public; and knowingly and substantially
1 1 1 1 participated or acquiesced in the issuance or dissemination of such statements or documents as primary violators of the federal securities laws. As set forth elsewhere herein in detail, defendants, by virtue of their receipt of information reflecting the true facts regarding Skechers and its business practices, their control over and/or receipt of Skechers' allegedly materially misleading misstatements and/or their associations with the Company which made them privy to confidential proprietary information concerning Skechers were active and culpable participants in the fraudulent scheme alleged herein.. Defendants knew and/or recklessly disregarded the falsity and misleading nature of the information which they caused to be disseminated to the investing public. The ongoing fraudulent scheme described in this complaint could not have been perpetrated over a substantial period of time, as has occurred, without the knowledge and complicity of the personnel at the highest level of the Company, including the Individual Defendants.. The Individual Defendants engaged in such a scheme to inflate the price of Skechers common stock in order to: (i) protect and enhance their executive positions and the substantial compensation and prestige they obtained thereby; (ii) enhance the value of their personal holdings of Skechers common stock; and (ii ) enable Skechers insiders to engaged in profitable sales of their personally-held Skechers common stock as detailed herein in attached Exhibit A. STATUTORY SAFE HARBOR. The federal statutory safe harbor provided for forward-looking statements under certain circumstances does not apply to any of the allegedly false statements pleaded in this Complaint. Further, none of the statements pleaded herein which were forward-looking statements were identified as "forward-looking statements" when made. Nor was it stated that actual results "could differ materially from those projected." Nor were the forward-looking
1 1 1 1 statements pleaded accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from the statements made therein. Defendants are liable for the forward-looking statements pleaded because, at the time each of those forward-looking statements was made, the speaker knew the forward-looking statement was false and the forward-looking statement was authorized and/or approved by an executive officer of Skechers who knew that those statements were false when made. APPLICABILITY OF PRESUMPTION OF RELIANCE: FRAUD-ON-THE-MARKET DOCTRINE. At all relevant times, the market for Skechers' securities was an efficient market for the following reasons, among others: (a) (b) (c) (d) Skechers' securities met the requirements for listing, and was listed and actively traded on the NYSE, a highly efficient and automated market; As a regulated issuer, Skechers filed periodic public reports with the SEC and the NYSE; Skechers regularly communicated with public investors via established market communication mechanisms, including the regular disseminations of press releases on the national circuits of major newswire services and through other wide-ranging public disclosures, such as communications with the financial press and other similar reporting services. Each of these releases was publicly available and entered into the marketplace; and Skechers was followed by securities analysts employed by major brokerage firms who wrote reports which were distributed to the sales force and certain customers of their respective brokerage firms. Each of these reports were publicly available and entered the public marketplace.. As a result of the foregoing, the market for Skechers' securities promptly digested current information regarding Skechers from all publicly available sources and reflected such information in Skechers' securities pricing. Under these circumstances, all purchasers of Skechers' securities during the Class Period suffered similar injury through their purchase of Skechers' securities at artificially inflated prices and a presumption of reliance applies.
1 1 1 1 FIRST CLAIM Violation Of Section (b) Of The Exchange Act And Rule b- Promulgated Thereunder Against All Defendants 0. Plaintiff repeats and reiterates the allegations set forth above as though fully set forth herein. This claim is asserted against all defendants. 1. During the Class Period, defendant Skechers and the Individual Defendants, and each of them, carried out a plan, scheme and course of conduct which was intended to and, throughout the Class Period, did: a) deceive the investing public, including plaintiff and other Class members, as alleged herein; b) artificially inflate and maintain the market price of Skechers' securities; and c) cause plaintiff and other members of the Class to purchase Skechers' securities at artificially inflated prices. In furtherance of this unlawful scheme, plan and course of conduct, defendants Skechers and the Individual Defendants, and each of them, took the actions set forth herein.. These defendants: a) employed devices, schemes, and artifices to defraud; b) made untrue statements of material fact and/or omitted to state material facts necessary to make the statements not misleading; and c) engaged in acts, practices, and a course of business which operated as a fraud and deceit upon the purchasers of the Company's securities in an effort to maintain artificially high market prices for Skechers' securities in violation of Section (b) of the Exchange Act and Rule b-. These defendants are sued either as primary participants in the wrongful and illegal conduct charged herein. The Individual Defendants are also sued as controlling persons of Skechers, as alleged below.. In addition to the duties of full disclosure imposed on defendants as a result of their making of affirmative statements and reports, or participation in the making of affirmative statements and reports to the investing public, they each had a duty to promptly disseminate
1 1 1 1 truthful information that would be material to investors in compliance with the integrated disclosure provisions of the SEC as embodied in SEC Regulation S-X ( C.F.R. 0.01 et seq.) and S-K ( C.F.R.. et seq.) and other SEC regulations, including accurate and truthful information with respect to the Company's operations, financial condition and performance so that the market prices of the Company's publicly traded securities would be based on truthful, complete and accurate information.. Skechers and the Individual Defendants, individually and in concert, directly and indirectly, by the use, means or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a continuous course of conduct to conceal adverse material information about the business, business practices, performance, operations and future prospects of Skechers as specified herein.. These defendants employed devices, schemes and artifices to defraud, while in possession of material adverse non-public information and engaged in acts, practices, and a course of conduct as alleged herein in an effort to assure investors of Skechers' value and performance and continued substantial growth, which included the making of, or the participation in the making of, untrue statements of material facts and omitting to state material facts necessary in order to make the statements made about Skechers and its business operations and future prospects in the light of the circumstances under which they were made, not misleading, as set forth more particularly herein, and engaged in transactions, practices and a course of business which operated as a fraud and deceit upon the purchasers of Skechers' securities during the Class Period.. Each of the Individual Defendants' primary liability, and controlling person liability, arises from the following facts: a) each of the Individual Defendants was a high-level executives and/or director at the Company during the Class Period; b) each of the Individual
1 1 1 1 Defendants, by virtue of his responsibilities and activities as a senior executive officer and/or director of the Company, was privy to and participated in the creation, development and reporting of the Company's internal budgets, plans, projections and/or reports; c) the Individual Defendants enjoyed significant personal contact and familiarity with each other and were advised of and had access to other members of the Company's management team, internal reports, and other data and information about the Company's financial condition and performance at all relevant times; and d) the Individual Defendants were aware of the Company's dissemination of information to the investing public which they knew or recklessly disregarded was materially false and misleading.. These defendants had actual knowledge of the misrepresentations and omissions of material facts set forth herein, or acted with reckless disregard for the truth in that they failed to ascertain and to disclose such facts, even though such facts were available to them. Such defendants' material misrepresentations and/or omissions were done knowingly or recklessly and for the purpose and effect of concealing Skechers' operating condition, business practices and future business prospects from the investing public and supporting the artificially inflated price of its securities. As demonstrated by defendants' overstatements and misstatements of the Company's financial condition and performance throughout the Class Period, the Individual Defendants, if they did not have actual knowledge of the misrepresentations and omissions alleged, were reckless in failing to obtain such knowledge by deliberately refraining from taking those steps necessary to discover whether those statements were false or misleading.. As a result of the dissemination of the materially false and misleading information and failure to disclose material facts, as set forth above, the market price of Skechers' securities were artificially inflated during the Class Period. In ignorance of the fact that market prices of Skechers' publicly-traded securities were artificially inflated, and relying directly or indirectly on
1 1 1 1 the false and misleading statements made by defendants, or upon the integrity of the market in which the securities trade, and/or on the absence of material adverse information that was known to or recklessly disregarded by defendants but not disclosed in public statements by defendants during the Class Period, plaintiff and the other members of the Class acquired Skechers securities during the Class Period at artificially high prices and were damaged thereby.. At the time of said misrepresentations and omissions, plaintiff and other members of the Class were ignorant of their falsity, and believed them to be true. Had plaintiff and the other members of the Class and the marketplace known of the true performance, business practices, future prospects and intrinsic value of Skechers, which were not disclosed by defendants, plaintiff and other members of the Class would not have purchased or otherwise acquired their Skechers securities during the Class Period, or, if they had acquired such securities during the Class Period, they would not have done so at the artificially inflated prices which they paid. 0. By virtue of the foregoing, Skechers and the Individual Defendants have each violated Section (b) of the Exchange Act, and Rule b- promulgated thereunder. 1. As a direct and proximate result of defendants' wrongful conduct, plaintiff and the other members of the Class suffered damages in connection with their respective purchases and sales of the Company's securities during the Class Period. SECOND CLAIM Violation Of Section (a) Of The Exchange Act Against the Individual Defendants. Plaintiff repeats and reiterates the allegations as set forth above as if set forth fully herein. This claim is asserted against the Individual Defendants.
1 1 1 1. Each of the Individual Defendants acted as a controlling person of Skechers within the meaning of Section (a) of the Exchange Act as alleged herein. By virtue of their high-level positions with the Company, participation in and/or awareness of the Company's operations and/or intimate knowledge of the Company's actual performance, the Individual Defendants had the power to influence and control and did influence and control, directly or indirectly, the decisionmaking of the Company, including the content and dissemination of the various statements which plaintiff contends are false and misleading. Each of the Individual Defendants was provided with or had unlimited access to copies of the Company's reports, press releases, public filings and other statements alleged by plaintiff to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.. In addition, each of the Individual Defendants had direct involvement in the day-to-day operations of the Company and, therefore, is presumed to have had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein, and exercised the same.. As set forth above, Skechers and the Individual Defendants each violated Section (b) and Rule b- by their acts and omissions as alleged in this Complaint. By virtue of their controlling positions, the Individual Defendants are liable pursuant to Section (a) of the Exchange Act. As a direct and proximate result of defendants' wrongful conduct, plaintiff and other members of the Class suffered damages in connection with their purchases of the Company's securities during the Class Period.
1 1 1 1 THIRD CLAIM For Breach of Fiduciary Duty Against All Defendants. Plaintiff repeats and realleges the allegations of the foregoing paragraphs as though set forth fully herein.. Defendants owed a fiduciary duty to the Class as purchasers and owners of Skechers stock.. Defendants, by means of their making the foregoing false and misleading statements, breached their fiduciary duty to the Class. STATUTE OF LIMITATIONS. This action is brought within the time limit prescribed by the statute of limitations for sections (b)and (a) of the Securities Exchange Act of,1 U.S.C. j(b) and t(a), as modified by the Private Securities Litigation Reform Act of (the "PSLRA"), 1 U.S.C. u-. Plaintiff only became aware of the crucial facts after December, 0, when a press release made on that date first evidenced to the public defendant's divergent representations. PRAYER FOR RELIEF 0. 1. WHEREFORE, Plaintiff on behalf of himself and of the Class pray for relief and judgment, as follows: (a) (b) (c) Declaring this action to be a class action pursuant to Rule (a) and (b)() of the Federal Rules of Civil Procedure on behalf of the Class defined herein; Awarding plaintiffs and the members of the Class damages in an amount which may be proven at trial, together with interest thereon; Awarding plaintiffs and the members of the Class pre judgment and postjudgment interest, as well as their reasonable attorneys' and experts' witness fees and other costs;
1 1 1 1 (d) (e) Awarding such other and further relief as this Court may deem just and proper including any extraordinary equitable and/or injunctive relief as permitted by law or equity to attach, impound or otherwise restrict the defendants' assets to assure plaintiffs have an effective remedy; and Such other relief as this Court deems appropriate. JURY TRIAL DEMANDED 1. Plaintiff hereby demands a trial by jury. Dated: April, 0 WOLF HALDENSTEIN ADLER FREEMAN & HERZ LLP Fred Taylor Isquith, Esq. (FI ) Gustavo Bruckner, Esq. (GB 01) 0 Madison Avenue New York, NY 0 Tel: () -00 Fax: (1) - LAW OFFICES OF CHARLES J. PIVEN Charles J. Piven, Esq. The World Trade Center - Baltimore 01 East Pratt Street, Suite Baltimore, MD Tel: () -000 Fax: () -0