Wednesday, April 18, 2007

Class Action Lawsuit Against Toll Brothers

by Bill McBride on 4/18/2007 01:53:00 PM

Press Release:

Lerach Coughlin today announced that a class action has been commenced in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of Toll Brothers, Inc. common stock during the period between December 9, 2004 and November 8, 2005.
...
The complaint charges Toll Brothers and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Toll Brothers is a home builder which specializes in building large, expensive homes.

The complaint alleges that defendants made a series of false and misleading statements indicating that Toll Brothers’ business model, which was based on developing expensive homes for a niche market of high-end buyers, was unique and thus immune from the adverse impact of rising interest rates and other negative macro-economic factors that appeared to be negatively impacting the home-building industry during 2004 and 2005.
I wonder if Larry Kudlow will want to join the lawsuit since he singled out Toll Brothers in June 20, 2005: The Housing Bears Are Wrong Again
... particularly well-run companies like Toll Brothers ...
For some interesting quotes, see the complaint. The complaint also notes that Chairman Robert Toll, and Vice Chairman Bruce Toll, sold millions of dollars of stock during the class period.

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