SECOND CLASS ACTION SUIT BY HOLDERS HITS MOSSIMO
NEW YORK — A shareholder class action suit has been filed against Mossimo Inc. in U.S. district court in Los Angeles.
The suit essentially duplicates a suit filed in a California state court in January 1997 alleging that the company and its two top executives made false statements to keep up the price of the firm’s stock.
The new suit was filed on behalf of purchasers of Mossimo common stock from Feb. 22, 1996, to Jan. 14, 1997, by the same law firm for the same defendants as in the January 1997 filing.
Mossimo went public at $18 a share in February 1996 and soared to a high of 50 1/4 that June, but fell as low as 5 7/8 after the firm revealed that a number of largely operational problems would hurt earnings in 1996 and restrain growth in 1997.
Shares of Mossimo closed Monday at 9 1/4, unchanged, on the New York Stock Exchange.
Both suits charge that the firm; Mossimo Giannulli, chairman and chief executive officer, and Eric R. Hohl, chief operating officer, made inaccurate statements throughout the spring and summer of 1996 about business conditions and growth prospects to prop up the stock price.
Mossimo in a statement released Friday noted the California suit was dismissed June 26 because of insufficient facts. Four of the complaints in the suit could be refiled in state court, but no amendments have been filed so far, Mossimo said.
Mossimo said it believes the allegations are without merit and intends to “vigorously defend itself against all these claims.”