Pomerantz LLP announces that a class action lawsuit has been filed against General Cable Corporation (“General Cable” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 17-cv-00092, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired General Cable securities between February 23, 2012 and February 10, 2016, both dates inclusive (the “Class Period”), seeking to recover compensable damages caused by defendants’ violations of the Securities Exchange Act of 1934.
General Cable is a global leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for use in the energy, industrial, construction, specialty and communications markets. The Company additionally engages in the design, integration, and installation on a turn-key basis for products such as high and extra-high voltage terrestrial and submarine systems.
The complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) General Cable paid millions of dollars in bribes to government officials in foreign countries, including Angola, Bangladesh, China, Egypt, Indonesia, India, and Thailand, in order to secure business; (ii) the foregoing conduct was in violation of the Foreign Corrupt Practices Act of 1997 (the “FCPA”); (iii) General Cable’s revenues were therefore in part the product of illegal conduct, and, as such, subject to disgorgement and unlikely to be sustainable; (iv) the foregoing conduct, when it became known, would subject the Company to significant regulatory scrutiny and financial penalties; and (v) as a result of the foregoing, the Company’s statements were materially false and misleading at all relevant times.
On September 22, 2014, General Cable disclosed that the Company was reviewing “payment practices,” “the use of agents,” and “the manner in which the payments were reflected on our books and records” in connection with General Cable’s operations in Portugal, Angola, Thailand, and India. General Cable advised investors that these issues “may have implications under” the Foreign Corrupt Practices Act.
On this news, General Cable stock fell $0.93, or 4.68%, to close at $18.96 on September 22, 2014.
On February 26, 2015, General Cable announced that in connection with a possible settlement of FCPA offenses, the Company expected to disgorge $24 million in profits from bribe-tainted sales in Angola.
On February 10, 2016, post-market, General Cable reported that the Company had increased its disgorgement accrual for the potential FCPA settlement by $9 million to $33 million, after identifying “certain other transactions that may raise concerns”.
On this news, General Cable’s share price fell $3.05, or 31.61%, to close at $6.60 on February 11, 2016.
On December 29, 2016, The Wall Street Journal reported that General Cable had entered into a non-prosecution agreement with the U.S. Department of Justice, in which the Company “agreed to pay $75.8 million to settle allegations it paid bribes across Africa and Asia and . . . agreed to an additional $6.5 million penalty to settle accounting-related violations.” The article further stated that the Company’s subsidiaries, “over a period of a dozen years, paid about $13 million to third-party agents and distributors,” who in turn “paid bribes to government officials in Angola, Bangladesh, China, Indonesia and Thailand to get business in violation of the Foreign Corrupt Practices Act.”