Conn’s Inc. Class Action Lawsuit
- Company Name
- Conn’s Inc.
- Stock Symbol
- Class Period
- September 3, 2019 to December 9, 2019
- Southern District of Texas
The Conn’s Inc. class action lawsuit charges Conn’s and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Conn’s securities between September 3, 2019 and December 9, 2019 (the “Class Period”). The Conn’s class action lawsuit was commenced on May 15, 2020 in the Southern District of Texas and is captioned Uddin v. Conn’s Inc., No. 20-cv-01705.
Conn’s is a specialty retailer that sells branded durable consumer goods.
The Conn’s class action lawsuit alleges that defendants failed to disclose to investors: (1) that Conn’s was experiencing an increase in first payment defaults and 60-plus day delinquencies; (2) that, as a result, Conn’s was reasonably likely to record an increase to its provision for bad debts; (3) that Conn’s made certain underwriting adjustments, including tightening its standards for new customers and online applicants; (4) that, as a result, Conn’s same-store sales would be adversely impacted; and (5) that, as a result of the foregoing, defendants’ positive statements about Conn’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
On December 10, 2019, Conn’s reported its third quarter 2020 financial results in a press release. Therein, Conn’s reported retail revenues of $280.3 million, compared to $284.1 million in the prior year period. Conn’s attributed the revenue decline to a decrease in same store sales, which “reflects underwriting adjustments made during the three months ended October 31, 2019.” Conn’s press release further revealed that Conn’s provision for bad debts was negatively impacted “by an increase in first payment default and delinquency rates” and that Conn’s “adjusted credit segment operating income for the three months ended October 31, 2019 was $16.8 million after excluding impairments of software costs for a loan management system that was abandoned during the third quarter of fiscal year 2020 related to the implementation of a new loan management system.” On this news, Conn’s share price fell $6.85 per share, or more than 33%, to close at $13.65 per share on December 10, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For seven consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.