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Embraer designs, develops, manufactures, and sells aircraft and systems in Brazil, North America, Latin America, the Asia-Pacific region, Europe, and internationally.
The Complaint alleges that throughout the Class Period, Defendants made 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) the Company had paid bribes to officials in the Dominican Republic to secure contracts for the sale of aircraft; (ii) Embraer's President and Chief Executive Officer ("CEO"), Defendant Frederico Pinheiro Fleury Curado ("Curado") was aware of the bribery scheme; (iii) the foreseeable consequences of the foregoing conduct would cost Embraer hundreds of millions of dollars; and (iv) as a result of the foregoing, Defendants' statements about Embraer's business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
On November 1, 2013, after the market closed, The Wall Street Journal reported that Embraer was under investigation by the U.S. and Brazilian governments concerning bribery of Dominican Republic officials to secure a contract for the sale of military aircraft.
On this news, Embraer's ADRs fell $0.17, or 0.57%, to close at $29.55 on November 4, 2013, the next trading day.
On September 23, 2014, shortly before the market closed, The Wall Street Journal reported that Brazilian authorities had filed bribery charges against eight Embraer employees, claiming that they had bribed officials in the Dominican Republic to secure a $92 million contract.
On this news, Embraer's ADRs fell $0.26, or 0.68%, to close at $38.25 on September 24, 2014.
On March 16, 2016, after the market closed, various media outlets reported that Elio Moti Sonnenfeld ("Sonnenfeld"), a sales consultant who purportedly paid bribes on behalf of Embraer, had told Brazilian prosecutors that he believed the Company's top managers, including Defendant Curado, then CEO of Embraer, knew of the illicit payments made in connection with the Dominican Republic sales.
On June 9, 2016, after the market closed, Embraer announced that Defendant Curado was stepping down from his position as CEO after 32 years with the Company, and that Paulo César de Souza e Silva would replace Curado as of July 2016.
On this news, Embraer's ADRs fell $1.18, or 5.44%, to close at $20.51 on June 10, 2016.
On July 29, 2016, Embraer filed a Form 6-K with the SEC, stating, in relevant part, that: [N]egotiations with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) for the settlement of the allegations of non-compliance with the U.S. Foreign Corrupt Practices Act (FCPA) have significantly progressed, to the point that Embraer is recognizing a US$ 200 million loss contingency in the quarter ended June 30, 2016.
Embraer also announced its financial and operating results for the quarter ended June 30, 2016. Embraer reported, inter alia, the $200 million loss contingency and a net loss for the quarter totaling $99.4 million, or $0.55 per share.
On this news, Embraer's ADRs fell $2.93, or 13.82%, to close at $18.27 on July 29, 2016.
The Pomerantz Firm, with offices in New York, Chicago, Florida, and Los Angeles, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
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SOURCE Pomerantz LLP