A lawsuit has been launched against ingredients giant Corn Products International, alleging that one or more of its directors violated federal securities laws by issuing false and misleading statements to the market.
The action charges that defendants violated federal securities laws by issuing statements that had the effect of artificially inflating the market price of the company's securities.
These allegations centre on Corn Products International's 5 April 2005 announcement that it expected first quarter earnings to decline by 35 to 40 percent from the first quarter of 2004.
The complaint alleges that prior to this announcement, Corn Products International had issued improper statements concerning its future prospects. At the time these were made, the complaint alleges, Corn Products International knew that it was experiencing manufacturing problems at certain of its facilities, causing expenses to rise dramatically above internally forecasted levels, and causing certain processing facilities to close and/or slowdown production.
The complaint also alleges that Corn Products International had contracted for corn in Canada in the late Fall of 2004 at prices higher than present prevailing prices, thereby forcing the it to purchase corn at above-market prices. In reaction to the 5 April 2005 announcement, the price of Corn Products International stock fell from a close of $25.86 per share on 4 April 2005, to close at $20.98 per share on 5 April 2005.
Law firms are representing shareholders who purchased, converted or exchanged the company's common stock between 25 January 2005 and 4 April 2005.
Securities investing and trading is carefully regulated in the US. Violation of these rules, particularly through various deceptive actions and schemes to cheat or take advantage of investors, is commonly known as securities fraud.
Federal and state laws provide a legal remedy for defrauded investors to recover their losses. Investors may also be entitled to compensation for the loss of income that their investments should have been generating, interest on the losses and legal fees.
The case has been filed in the United States District Court for the Northern District of Illinois.
Corn Products International , headquartered in Westchester, Illinois, is one of the world's largest corn refiners. With net sales last year of $2.3 billion, the company has operates plants spanning 16 countries.
The company stock is traded on the NYSE under the symbol CPO.