(CN) – A class action against PPG Industries Inc. alleges the company sold shares at trumped up prices for more than a year before disclosing that an investigation by its audit committee uncovered errors made by certain employees at the direction of a former vice president and controller.
Lead plaintiff Trevor Mild filed suit in the U.S. District Court for Central California on behalf of investors who purchased PPG stock from April 24, 2017 to May 10, 2018. Headquartered in Pittsburg, Pennsylvania, PPG is a global supplier of paints, coatings and specialty materials. The company maintains research and development centers in Burbank, California.
On April 19, 2018, PPG announced an ongoing investigation into potential violations of its accounting policies after identifying certain expenses that should have been accrued in the first quarter. This news caused PPG stock to fall $0.77 by April 20.
On May 10, 2018, PPG further revealed that the same investigation uncovered improper income reclassification entries made at the direction of its vice president and controller, Mark C. Kelly, who was terminated effective that day. The company also announced that it would not be able to file its quarterly report for the quarter ending March 31, 2018 on time and that financial statements for 2017 should not be relied upon. Following this news, PPG shares fell $5.68 on May 11.
The class claims PPG executives signed off on financial statements during the class period knowing they were false and misleading.
The class is represented by Laurence M. Rosen in Los Angeles.