Pomerantz Appointed Lead Counsel in Embraer S.A. Securities Litigation
Pomerantz LLP has been appointed Lead Counsel in a class action lawsuit against Embraer S.A. (“Embraer” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Southern District of New York, and docketed under 16-cv-06277, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired Embraer securities between April 16, 2012 and July 28, 2016 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
Embraer designs, develops, manufactures, and sells aircraft and systems in Brazil, North America, Latin America, the Asia-Pacific region, Europe, and internationally.
The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company had paid bribes to officials in the Dominican Republic to secure contracts for the sale of aircraft; (ii) Embraer’s President and Chief Executive Officer (“CEO”), Defendant Frederico Pinheiro Fleury Curado (“Curado”) was aware of the bribery scheme; (iii) the foreseeable consequences of the foregoing conduct would cost Embraer hundreds of millions of dollars; and (iv) as a result of the foregoing, Defendants’ statements about Embraer’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
On November 1, 2013, after the market closed, The Wall Street Journal reported that Embraer was under investigation by the U.S. and Brazilian governments concerning bribery of Dominican Republic officials to secure a contract for the sale of military aircraft.
On this news, Embraer’s ADRs fell $0.17, or 0.57%, to close at $29.55 on November 4, 2013, the next trading day.
On September 23, 2014, shortly before the market closed, The Wall Street Journal reported that Brazilian authorities had filed bribery charges against eight Embraer employees, claiming that they had bribed officials in the Dominican Republic to secure a $92 million contract.
On this news, Embraer’s ADRs fell $0.26, or 0.68%, to close at $38.25 on September 24, 2014.
On March 16, 2016, after the market closed, various media outlets reported that Elio Moti Sonnenfeld (“Sonnenfeld”), a sales consultant who purportedly paid bribes on behalf of Embraer, had told Brazilian prosecutors that he believed the Company’s top managers, including Defendant Curado, then CEO of Embraer, knew of the illicit payments made in connection with the Dominican Republic sales.
On June 9, 2016, after the market closed, Embraer announced that Defendant Curado was stepping down from his position as CEO after 32 years with the Company, and that Paulo César de Souza e Silva would replace Curado as of July 2016.
On this news, Embraer’s ADRs fell $1.18, or 5.44%, to close at $20.51 on June 10, 2016.
On July 29, 2016, Embraer filed a Form 6-K with the SEC, stating, in relevant part, that: [N]egotiations with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) for the settlement of the allegations of non-compliance with the U.S. Foreign Corrupt Practices Act (FCPA) have significantly progressed, to the point that Embraer is recognizing a US$ 200 million loss contingency in the quarter ended June 30, 2016.
Embraer also announced its financial and operating results for the quarter ended June 30, 2016. Embraer reported, inter alia, the $200 million loss contingency and a net loss for the quarter totaling $99.4 million, or $0.55 per share.
On this news, Embraer’s ADRs fell $2.93, or 13.82%, to close at $18.27 on July 29, 2016.