NEW YORK, Nov. 22, 2013 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed in United States District Court for the District of New York, on behalf of all persons who purchased Tile Shop Holdings, Inc. ("Tile Shop" or the "Company") (Nasdaq:TTS) securities during the period August 22, 2012 and November 13, 2013, and who were damaged thereby. This action alleges claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
The Complaint alleges that Tile Shop failed to disclose that one of its largest suppliers, Beijing Pingxiu ("BP"), is an undisclosed related company secretly controlled by Fumitake Nishi, the brother-in-law of the Company's CEO and a Tile Shop employee. On November 14, 2013, Gotham City Research LLC issued a report asserting that the Tile Shop: (a) greatly exaggerated its true financial performance; (b) failed to disclose BP as a material related party supplier; (c) uses BP to overstate inventories, understate cost of sales and overstate gross profits; (d) purchases goods from BP at or near cost to allow Tile Shop to achieve an artificial cost advantage; and (e) overstates earnings. The Complaint asserts that when this adverse information entered the market, the price of Tile Shop shares dropped substantially, damaging investors.
If you wish to serve as lead plaintiff, you must move the Court no later than January 14, 2014. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at firstname.lastname@example.org or email@example.com.
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Source:Gainey McKenna& Egleston