Interface, Inc. Class Action Lawsuit
- Company Name
- Interface, Inc.
- Stock Symbol
- Class Period
- March 2, 2018 to September 28, 2020
- Eastern District of New York
The Interface, Inc. class action lawsuit charges Interface and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Interface securities between March 2, 2018 and September 28, 2020, inclusive (the “Class Period”). The Interface class action lawsuit was commenced on November 12, 2020 in the Eastern District of New York and is captioned Swanson v. Interface, Inc., No. 20-cv-05518.
Interface is a modular flooring company that designs, produces, and sells modular carpet products primarily in the Americas, Europe, and the Asia-Pacific region.
The Interface class action lawsuit alleges that, during the Class Period, defendants made false and/or misleading statements and/or failed to disclose that: (i) Interface had inadequate disclosure controls and procedures and internal control over financial reporting; (ii) consequently, Interface, among other things, reported artificially inflated income and earnings per share (“EPS”) in 2015 and 2016; (iii) Interface and certain of its employees were under investigation by the U.S. Securities and Exchange Commission (“SEC”) with respect to the foregoing issues since at least November 2017, had impeded the SEC’s investigation, and had downplayed the true scope of Interface’s wrongdoing and liability with respect to the SEC investigation; and (iv) as a result, Interface’s public statements were materially false and misleading at all relevant times.
On April 24, 2019, Interface filed a current report on Form 8-K with the SEC disclosing, among other things, that Interface had “received a letter in November 2017 from the [SEC] requesting [Interface] voluntarily provide information and documents in connection with an investigation into [Interface]’s historical quarterly [EPS] calculations and rounding practices during the period 2014-2017”; that “[Interface] subsequently received subpoenas from the SEC in February 2018, July 2018 and April 2019 requesting additional documents and information”; and that “[i]n the fourth quarter of 2018, [Interface] conducted at the SEC’s request an internal investigation into these and other related issues for seven quarters in 2015, 2016 and 2017.” On this news, Interface’s stock price fell more than 8%.
Then, on September 28, 2020, the SEC announced the conclusion of its investigation into Interface’s historical quarterly EPS calculations and rounding practices. Interface agreed to pay a $5 million fine to resolve the matter and was ordered to cease and desist from violating the federal securities laws. In the SEC’s enforcement order issued that same day, the SEC also disclosed how, among other things, “Interface employees caused Interface to produce documents in response to Commission investigative requests that were suggestive of contemporaneous support for journal entries that, in truth, did not exist at the time the entries were recorded” and had modified certain documents after the SEC’s investigation began. On this news, Interface’s stock price fell an additional 3%, further damaging investors.
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