Burlington Free Press reports the suit, which seeks class action status, alleges the company falsified financial records to cast a rosier picture of its performance, and doing so cost investors billions of dollars. The Louisiana Municipal Police Employees’ Retirement System accuses Green Mountain of concocting an “elaborate scheme” involving “falsified financial documents” — charges the coffee roaster denies.
According to Burlington Free Press, the lawsuit states the Louisiana police retirement program purchased Green Mountain Coffee stock at “artificially inflated prices” from February 2 to November 9 because of false and misleading statements made by the company and its officials.
The lawsuit names Green Mountain Coffee Roasters founder Robert Stiller and president and CEO Lawrence Blanford as defendants along with seven other officers and board members, stock analysts and banks that underwrote a May stock offering of 7.1 million shares.
Green Mountain Coffee spokeswoman Suzanne DuLong said the company has done nothing wrong. “We have reviewed the complaint, believe the claims are without merit and will defend ourselves vigorously,” DuLong said.
The U.S. Securities and Exchange Commission launched an inquiry into accounting practices at Green Mountain Coffee in September 2010 that remains open. The company says it has cooperated fully.
The news report says the lawsuit claims that once Green Mountain Coffee’s “true state of affairs” became known in November — when it missed sales projections for the fourth quarter, and the full fiscal year ending September 24 — a precipitous price drop caused investors to lose billions of dollars. “All told, these corrective disclosures wiped out approximately $6.5 billion in market capitalization,” the lawsuit states.The lawsuit further alleges Green Mountain Coffee founder Stiller, CEO Blanford and chief financial officer Frances Rathke sold “suspicious amounts” of their Green Mountain Coffee shares during the period covered by the lawsuit.