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$2 Million Pokemon class action Suit
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Grand Toys agrees to Pay $2 million dollars for misleading statements regarding Pokémon licencing.
Canadian toy maker Grand Toys International Inc. has agreed to pay $1,975,000 in a class action lawsuit filed against the company by shareholders and investors. The suit, which was filed in the United States District Court for the Southern District of New York, claims that the company and three of its directors made misleading
The claims stem from a press release that the company issued in August 1999 claiming that they had obtained exclusive rights to manufacture and distribute Pokémon products in Canada.
As a result of the press release the companies stock skyrocketed and reached an all time high of US$30.25 on August 25th, 1999. The following day, the company issued a second press release stating that their rights to Pokémon were not exclusive.
The stock fell dramatically following the second press release, and despite some spikes, it has steadily declined to its current value of 41 cents and is now in serious danger of being removed from the Nasdaq.
During the period that the stock was trading at high prices, several company officials, including those named in the suit (the chairman, vice chairman and CFO), made millions of dollars exercising their stock options and subsequently selling the shares that they had purchased at low prices.
Despite agreeing to pay the setlement, the company has not admitted to any wrongdoing.
The claims stem from a press release that the company issued in August 1999 claiming that they had obtained exclusive rights to manufacture and distribute Pokémon products in Canada.
As a result of the press release the companies stock skyrocketed and reached an all time high of US$30.25 on August 25th, 1999. The following day, the company issued a second press release stating that their rights to Pokémon were not exclusive.
The stock fell dramatically following the second press release, and despite some spikes, it has steadily declined to its current value of 41 cents and is now in serious danger of being removed from the Nasdaq.
During the period that the stock was trading at high prices, several company officials, including those named in the suit (the chairman, vice chairman and CFO), made millions of dollars exercising their stock options and subsequently selling the shares that they had purchased at low prices.
Despite agreeing to pay the setlement, the company has not admitted to any wrongdoing.
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