NYPD pension fund sues Amazon over ‘artificially inflated’ stock prices

The pension fund of thousands of New York police detectives has sued Amazon in federal court, claiming the company and its executives misled investors and hid losses spurred by ‘excessive’ expansion of society during the coronavirus pandemic.

According to the lawsuit, the Detectives’ Endowment Association (DEA) annuity fund claims it purchased nearly $3 million worth of Amazon stock “at artificially inflated prices” before the company finally disclosed $3.8 billion. dollars of losses in the first quarter 2022 earnings report.

“Defendants failed to disclose and actively concealed from investors that instead of being necessary to meet short- and long-term demand, Amazon’s accelerated and rapid expansion had created a costly over-expansion situation. and unnecessary that exposed Amazon to massive losses that threatened to cause, and caused the substantial and significant depletion of its revenue,” the lawsuit reads.

New York Court of Appeals dismisses lawsuit against Amazon

Reported losses in the first quarter sent shares down about 10% in after-hours trading.

Amazon CEO Andy Jassy, ​​Chief Financial Officer Brian Olsavsky and Investor Relations Manager David Fildes are listed as the main defendants in the case.

The police pension fund filed the lawsuit as a class action lawsuit on behalf of all “individuals and entities who acquired common stock of Amazon between July 30, 2021 and April 28, 2022.”

Amid Amazon’s steep losses – the first time the company has posted quarterly losses since 2015 – Amazon’s head of consumer business Dave Clark resigned on July 1 to ‘pursue other opportunities’ , according to an Amazon press release. He left just six weeks after the company’s losses were published.

In an effort to keep market prices artificially high, the lawsuit claims Amazon used devices, schemes and artifices to defraud while making false statements about the stock’s value.

“Eu [the] plaintiff and other class members knew the truth about Amazon’s financial results, which was not disclosed by [the] accused, [the] plaintiff and other class members would not have purchased or otherwise acquired their common stock of Amazon, or, if they had acquired such securities during the Class Period, they would not have done so at the artificially inflated prices that they paid,” the suit read.

Along with the lawsuit, a coalition of labor unions also filed a lawsuit with the U.S. Securities Exchange Commission last week, claiming that Amazon misled investors by publicly sharing “selected and outdated data” about its trading rates. injuries in warehouses last spring, according to Geekwire.

Amazon declined to comment on the situation.

Dolores W. Simon