Costco investors may receive additional information about the case by clicking the link "Submit Your Information" above.
According to the complaint, Costco engages in the operation of membership warehouses. As of September 3, 2017, Costco operated 741 warehouses worldwide. Through the membership warehouses, Costco aims at offering low prices on a limited selection of national products in certain categories to produce high sales volumes and rapid inventory turnover.
The Class Period commences on June 6, 2018, when Costco filed a Form 10-Q with the SEC announcing its financial and operating results for the third fiscal quarter and nine months ended May 13, 2018.
According to the complaint, on October 4, 2018, Costco issued a press release announcing its financial and operating results for the fourth fiscal quarter and year ended September 2, 2018. The press release stated, in relevant part, that “in its upcoming fiscal 2018 Annual Report on Form 10-K, it expects to report a material weakness in internal control. The weakness relates to general information technology controls in the areas of user access and program change-management over certain information technology systems that support the [c]ompany’s financial reporting processes. The access issues relate to the extent of privileges afforded users authorized to access company systems.” Following this news, the price of Costco’s common stock declined $12.86 from a close on October 4, 2018 at $231.68 per share, to a close on October 5, 2018 at $218.82 per share, a drop of approximately 5.55%.
Then, on October 26, 2018, Costco filed a Form 10-K with the SEC announcing its financial and operating results for the fiscal fourth quarter and fiscal year ended September 2, 2018. In the Form 10-K, Costco stated, “[w]e identified a material weakness in internal control related to ineffective information technology general controls (ITGCs) in the areas of user access and program change-management over certain information technology (IT) systems that support the [c]ompany’s financial reporting processes. . . . Based on this material weakness, the [c]ompany’s management concluded that at September 2, 2018, the [c]ompany’s internal control over financial reporting was not effective.” Following this news, the price of Costco’s common stock declined $8.21 from a close on October 25, 2018 at $226.40 per share, to a close on October 26, 2018 at $218.19 per share, a drop of approximately 3.63%.
The complaint alleges that throughout the Class Period, the defendants failed to disclose that: (i) Costco lacked effective internal control over financial reporting; and (ii) as a result of the foregoing, the defendants’ statements about Costco’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.
If you are a member of the class described above, you may no later than January 7, 2019 move the Court to serve as lead plaintiff of the class, if you so choose.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Returning any form or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of the class member's choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check, LLP is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.
Kessler Topaz Meltzer & Check, LLP
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