Investors in food company Pilgrim’s Pride claimed there is evidence that the company misled them and other investors in a class action lawsuit filed on Monday in the District of Colorado. They say the company “touted” its competitive strengths and advantages when the company’s success was actually due to anticompetitive behavior and a price-fixing conspiracy.
The Department of Justice announced charges against executives in Pilgrim’s Pride and other executives in the chicken industry for price-fixing at the beginning of June, specifically for violations of the Sherman Act. The alleged price-fixing occurred between 2012 and 2017. After the announcement, common stock in Pilgrim’s Pride declined $2.58 per share.
The plaintiffs argued that the company failed to disclose facts which led to a decline in market value and made misleading statements. They said the company claimed a leading position in the market and its “competitive advantages” were the cause of the company’s success, rather than the illegal behavior.
“During the Class Period, Defendants had both the motive and opportunity to commit fraud. They also had actual knowledge of the misleading nature of the statements they made, or acted in reckless disregard of the true information known to them at the time. In so doing, Defendants participated in a scheme to defraud and committed acts, practices, and participated in a course of business that operated as a fraud or deceit on purchasers of Pilgrim’s Pride common stock during the Class Period,” the complaint states.
The plaintiffs said the class includes any who purchased Pilgrim’s Pride common stock during the time period, excluding those connected directly with the company’s agents, directors, and officers. The plaintiffs, including the United Food and Commercial Workers International Union Local 464A, trustees of various funds, and pension organizations, filed the lawsuit against Pilgrim’s Pride Corporation, two former CEOs of Pilgrim’s, and the current interim CEO. The plaintiffs are represented by Wheeler Trigg O’Donnell.
Restaurant companies filed four separate lawsuits against Pilgrim’s Pride and other chicken companies in the Northern District of Illinois on June 12 for the same anti-competitive behaviors.