TransDigm Group Incorporated
ROBBINS GELLER RUDMAN & DOWD LLP FILES CLASS ACTION SUIT AGAINST TRANSDIGM GROUP INCORPORATED
San Diego – September 18, 2017 – Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/transdigm/) today announced that a class action has been commenced by an institutional investor on behalf of purchasers of TransDigm Group Incorporated (“TransDigm”) (NYSE:TDG) securities during the period between May 10, 2016 and March 21, 2017 (the “Class Period”). This action was filed in the Northern District of Ohio and is captioned City of Warren Police and Fire Retirement System v. TransDigm Group Incorporated, et al., No. 17-1958.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from August 10, 2017. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed at http://www.rgrdlaw.com/cases/transdigm/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges TransDigm and certain of its officers and directors with violations of the Securities Exchange Act of 1934. TransDigm is a global designer, producer and supplier of highly engineered components for use on commercial and military aircraft.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements and/or failed to disclose material adverse facts regarding the Company’s operations, business and prospects. Specifically, the Company failed to disclose that during the Class Period, TransDigm had used shell distributors it controlled to make noncompetitive government bids seem competitive, monopolistic tactics to unreasonably hike the prices of its proprietary products, and a variety of tactics to evade government oversight of its cost structure and avoid government scrutiny. As a consequence, TransDigm’s growth and profitability during the Class Period were artificially inflated as a result of its illicit business practices and were therefore unsustainable. As a result of these false statements and/or omissions, TransDigm shares traded at artificially inflated prices, reaching close to $290 per share during the Class Period.
On January 20, 2017, short seller Citron Research (“Citron”) issued a report accusing TransDigm of being the “Valeant of the Aerospace Industry.” The report accused the Company of employing an unsustainable business strategy whereby it utilized massive leverage to buy up airplane parts companies, fire workers and then “egregiously” jack up the prices of the proprietary products it acquired. The report disclosed that the Company used multiple shell distributors, which have no pricing power, to make government bids seem competitive when in truth these distributors were simply “shills” for TransDigm. In addition, the report alleged that the Company had thwarted a prior government audit into its cost structure by employing a variety of stonewalling tactics. As a result of this news, the price of TransDigm shares dropped 10%, or $24.86 per share, to close at $226.90 per share on January 20, 2017.
Then on March 21, 2017, the office of U.S. Congressman Ro Khanna announced it had sent a letter to the Inspector General for the Department of Defense requesting that it conduct an investigation into TransDigm’s business practices. Specifically, the letter raised concerns that the Company was acting as a “hidden monopolist” by engaging in a series of unreasonable price increases for products for which the Company was the only supplier and disguising its cost structure to evade Pentagon oversight. As a result of this news, the price of TransDigm shares dropped $23.09 per share over two trading days to close at $214.85 per share on March 22, 2017, a decline of nearly 10%.
Plaintiff seeks to recover damages on behalf of all purchasers of TransDigm securities during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud.
Robbins Geller is widely recognized as a leading law firm advising and representing U.S. and international investors in securities litigation and portfolio monitoring. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For the third consecutive year, the Firm ranked first in both the total amount recovered for investors and the number of shareholder class action recoveries in ISS's SCAS Top 50 Report. Robbins Geller attorneys have shaped the law in the areas of securities litigation and shareholder rights and have recovered tens of billions of dollars on behalf of the Firm’s clients. Robbins Geller not only secures recoveries for defrauded investors, it also implements significant corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.