The Plumbers Local #200 Pension Fund filed the suit in October 2010 on behalf of itself and a purported class of all those who purchased Washington Post common stock between July 31, 2009, and August 31, 2010.
According to the court opinion, the suit alleges that during the Class Period, the defendants issued materially false and misleading statements about the Washington Post’s business and financial results. The complaint said “defendants failed to disclose that the [Washington Post] had been engaging in abusive and fraudulent recruiting and financial aid lending practices, thereby increasing [the] Washington Post’s student enrollment and revenues.”
As a result, the Washington Post’s common stock allegedly traded at “artificially inflated prices during the Class Period, reaching a high of $541.38 per share on April 15, 2010.” Eventually, information about the Washington Post’s allegedly abusive and fraudulent practices “seeped into the market” resulting in “massive sales” of common stock, which decreased their value “approximately 41.7% from the Class Period high,” according to the complaint.
The suit seeks damages and injunctive relief.
The U.S. District Court for the District of Columbia concluded that Iron Workers is the member of the purported plaintiff class that is the “most capable of adequately representing the interests of class members.” The court’s opinion noted that Iron Workers has provided documentation that it purchased 2,060 shares of Washington Post common stock during the Class Period, and asserts that it “lost in excess of $245,000 due to [the] defendants’ [alleged] misconduct.”
The initial named plaintiff, Plumbers Local, only purchased 440 shares of Washington Post common stock during the Class Period.
The court said no evidence in the record that anyone else has a larger financial interest than Iron Workers, and no member of the purported class has challenged Iron Workers’ claim that it has the largest financial interest in this case.A copy of the opinion can be viewed here.