Home Depot class action suit dismissed
Industrial Distribution staff -- Industrial Distribution, 10/13/2008 7:56:00 AM
The federal appeals court in Atlanta dismissed a class action lawsuit accusing Home Depot of securities fraud, the Atlanta Journal-Constitution reported.The 11th U.S. Circuit Court of Appeals ruled unanimously that the lawsuit, which accused the Atlanta-based home improvement retailer and six of its executives of improperly inflating its financial results, failed to meet the requirements of a class action suit set by Congress.
The suit claimed that the company received excessive vendor rebates between 2001 and 2004, without telling shareholders, and that the rebates inflated its revenues and stock price. But the rules set by Congress stipulate that class action suits can only be filed for cases in which there is a “strong inference” that a firm acted with bad intent.
In this case, Judge Stanley Marcus wrote, the accusations “do not pass Congress’s stringent test.”
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