NEW YORK, June 3, 2016 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed on behalf of Gerdau S.A. ("Gerdau" or the "Company") (NYSE: GGB) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-03925, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Gerdau securities as American depositary receipts ("ADRs") between June 2, 2011 and May 15, 2016, inclusive (the "Class Period"). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
If you are a shareholder who purchased Gerdau securities during the Class Period, you have until July 25, 2016 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll free, ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and number of shares purchased.
Gerdau produces and commercializes steel products worldwide. The Company operates through Brazil Business Operation, North America Business Operation, South America Business Operation, and Special Steel Business Operation segments.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company was engaged in a bribery scheme in collusion with Brazil's Board of Tax Appeals ("CARF"); (ii) Gerdau had defrauded Brazilian tax authorities of roughly $429 million in taxes; (iii) Gerdau's Chief Executive Officer ("CEO"), Defendant André Bier Gerdau Johannpeter ("Johannpeter") and other directors and employees of the Company had engaged in bribery, money laundering, and influence peddling; and (iv) as a result of the foregoing, Defendants' statements about Gerdau's business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
On or about March 26, 2015, Brazilian authorities announced that a Federal Police investigation, dubbed Operation Zelotes, had uncovered a multibillion-dollar tax fraud scheme at the Ministry of Finance ("Finance Ministry"), reporting that as many as 70 companies had bribed members of the CARF, a body within the Finance Ministry that hears appeals on tax disputes, to obtain favorable rulings that recused or waived the amounts that the companies owed. On or around March 29, 2015, it was reported that Gerdau was among the companies under investigation.
On December 4, 2015, the Brazilian publication Jornal do Comércio reported that a report by a committee of the National Congress of Brazil had named Gerdau, along with other companies, as a beneficiary of a tax evasion scheme.
On this news, Gerdau's ADR price fell $0.11, or 6.96%, to close at $1.47 on December 4, 2015.
On or around February 25, 2016, post-market, Brazilian police raided Gerdau offices in connection with Operation Zelotes, as police carried out some 20 court orders for testimony and 18 search warrants in Recife, Porto Alegre, Rio de Janeiro, Sao Pãulo, and Brasília. Gerdau's CEO, Defendant Johannpeter, was among the individuals ordered to testify by day's end. In an e-mailed statement, Gerdau stated that the Company had never authorized the use of its name in illegal negotiations and that the Company abided by rigorous ethical standards.
On this news, Gerdau's ADR price fell $0.03, or 3.16%, to close at $0.92 on February 25, 2016.
On February 29, 2016, Gerdau announced that it would delay the release of its fourth-quarter financial results as the Company "analyze[d] the case records involving Gerdau in the recent phase of [the] Zelotes Operation."
On May 16, 2016, various news outlets reported that Brazil's federal police had accused Gerdau of evading $429 million in taxes and indicted a total of 19 Gerdau personnel, including Defendant Johannpeter and some of the Company's executives, directors and lawyers, on corruption-related charges including bribery, money laundering, and influence peddling.
On this news, Gerdau's ADR price fell $0.13, or over 7%, to close at $1.72 on May 16, 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