- Company Name
- Ternium S.A.
- Stock Symbol
- Class Period
- May 1, 2014 to November 27, 2018
- Motion Deadline
- January 28, 2019
- Eastern District of New York
The complaint charges Ternium and certain of its officers and/or directors with violations of the Securities Exchange Act of 1934. Ternium, through its subsidiaries, manufacturers and processes various steel products. Ternium was formed in 2005 by the consolidation of Siderar of Argentina, Sidor of Venezuela and Hylsa of Mexico. In 2008, Venezuela ordered the nationalization of Sidor, and in 2009, Ternium sold its 59.7% stake in Sidor to a Venezuelan state-owned entity for $1.97 billion. It took several years – from 2009 to 2012 – for Ternium to receive the money for the sale of its stake in Sidor.
The complaint alleges that defendants made false and misleading statements and/or failed to disclose adverse information regarding Ternium’s business and operations. Specifically, defendants failed to disclose that defendant Paolo Rocca, Ternium’s Chairman, knew that one of his Company’s executives had paid cash to government officials from 2009 to 2012 to expedite compensation payments for the sale of Ternium’s Sidor unit, which would lead to Rocca being charged in a graft scheme and subject Ternium, its affiliates and/or its executives to heightened governmental scrutiny. As a result of this information being withheld from investors, Ternium shares traded at artificially inflated prices during the Class Period, reaching a high of more than $40 per share.
Then on November 27, 2018, Bloomberg reported that Rocca had been indicted for his role in the graft scheme, stating that the “judge charged Rocca after the Argentine billionaire testified that one of his company’s executives paid an undisclosed amount of cash government officials in monthly installments from 2009 to 2012” in order to “speed up a compensation payment from Venezuela’s Hugo Chavez for the nationalization of Sidor.” On this news, the price of Ternium shares fell $1.42 per share, or nearly 5%, to close at $28.02 per share on November 27, 2018.