On May 3, 2017, the initial complaint in this securities class action was filed against United States Steel Corporation (“U.S. Steel” or the “Company”), and certain of U.S. Steels’s directors, officers and underwriters, asserting violations of sections 10(b) and 20(a) of the Securities Exchange Act.
The complaint alleges that during the class period, U.S. Steel made materially false and misleading statements regarding its outlook and expected financial performance. The complaint alleges that the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (1) While the Company was implementing its Carnegie Way program, it was focused on cutting costs and was not making investments necessary to position U.S. Steel so that it could respond to improved market conditions; (2) defendants' failure to invest in improving capital assets during the industry downturn, in order to report apparent financial improvements, meant that U.S. Steel had higher production costs than its competitors, even in the face of improved pricing, which would negatively impact its financial results; (3) defendants were forestalling expensive capital equipment upgrades in order to boost the Company's short-term financial results at the expense of long-term financial performance, leaving U.S. Steel in need of accelerated, costly equipment upgrades that would leave the Company years away from generating improved financial performance; and (4) as a result of the foregoing, defendants' statements regarding the Company's outlook and expected financial performance were false and misleading and lacked a reasonable basis when made. The complaint alleges that as a result of defendants' false statements and material omissions, U.S. Steel stock traded at artificially inflated prices during the class period, and that after the above revelations were revealed to the market, the price of U.S. Steel stock declined significantly as the artificial inflation was removed.
Current Status of Case:
On March 18, 2018, the Court issued an Order dismissing two counts from Plaintiffs’ Amended Complaint and the underwriter defendants were also dismissed. On December 31, 2019, the Court issued an Order granting the Motion for Class Certification and certified a Class consisting of all persons who purchased or otherwise acquired U.S. Steel securities between January 27, 2016 and April 25, 2017.
Current Status of Case:
The parties are currently conducting discovery and are currently briefing several discovery disputes before the Court. This action remains ongoing.
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