SAN DIEGO and PLYMOUTH, Minn., Nov. 19, 2013 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that an investor of Tile Shop Holdings, Inc. (NASDAQ: TTS) has filed a federal securities fraud class action complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers violated the Securities and Exchange Act of 1934 between August 22, 2012 and November 13, 2013 (the "Class Period"). Tile Shop Holdings, Inc. operates as a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories.
Tile Shop Accused of Failing to Disclose Related Party Transactions and Overstating Profits
Shares of Tile Shop fell $8.27, or 37%, to close at $12.95 on November 14, 2013, after the release of a report by Gotham City Research LLC claiming that the company's financial results were overstated. According to the complaint, Tile Shop made false and misleading statements and/or failed to disclose material adverse facts about the company's business prospects and financial condition. In particular, the complaint alleges that, throughout the Class Period, Tile Shop failed to disclose to investors that one of its largest suppliers, Beijing Pingxiu, was an undisclosed related company controlled by the brother-in-law of the company's CEO, Robert A. Rucker. Further, the Gotham report concluded that Tile Shop overstated its inventory leading to a 200% overstatement of the company's Trailing Twelve Months earnings of $28 million.
Tile Shop Shareholders Are Encouraged to Contact Shareholder Rights Law Firm Robbins Arroyo
If you invested in Tile Shop and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the information form on the firm's shareholder rights blog: http://www.robbinsarroyo.com/shareholders-rights-blog/tile-shop-holdings-inc/
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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SOURCE Robbins Arroyo LLP