Pyxus International, Inc. f/k/a Alliance One International, Inc.

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Case Summary

Company Name
Pyxus International, Inc. f/k/a Alliance One International, Inc.
Stock Symbol
Class Period
June 7, 2018 to November 8, 2018
Motion Deadline
August 6, 2019
Eastern District of North Carolina

The complaint charges Pyxus and certain of its officers with violations of the Securities Exchange Act of 1934.  Pyxus is an agricultural company that historically focused on purchasing, processing and shipping tobacco to manufacturers of cigarettes and other consumer tobacco products throughout the world.  The Company changed its name from Alliance One International, Inc. to Pyxus on September 12, 2018.

The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations, and prospects.  Specifically, defendants failed to disclose that the Company was experiencing longer shipping cycles, which would materially affect the Company’s financial results.  In addition, the Company lacked adequate internal control over financial reporting, which was reasonably likely to lead to regulatory scrutiny of the Company.  As a result of this information being withheld from the market, Pyxus securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $43 per share.

On November 8, 2018, the Company announced its financial results for the second quarter of fiscal 2018, ended September 30, 2018.  The Company reported total sales and other operating revenues had “decreased 11.7% to $394.9 million compared to the same period in the prior year,” which it blamed “primarily [on] a 10.8% decrease in volumes mainly attributable to the timing of shipments, the larger crop last year in South America, and the stronger U.S. dollar versus certain currencies.”  In addition, the Company reported a 29% decrease in gross profits for the quarter.  On this news, the price of Pyxus stock fell $7.01 per share, or nearly 28%, to close at $18.26 per share on November 8, 2018.

The next day, the SEC announced the Company had settled charges that it had violated the reporting, books and records, and internal accounting control provisions of the federal securities laws.  According to the SEC, “managers at [Pyxus’s] Kenyan subsidiary overrode existing controls and failed to report accounting errors to [Pyxus].  As a result, [Pyxus] filed materially misstated financial statements with the [SEC] from at least 2011 through the second quarter of 2015.  These misstatements resulted from improper and insufficient accounting, processes, and control activities for inventory, deferred crop costs, and revenue transactions in Africa.”  This caused the price of Pyxus stock to decline another nearly 16%.

Class Period: June 7, 2018 - November 8, 2018
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