Magna Sued by City Pension Fund Over Plund in Share Price
Magna International Inc. (MG), a Canadian supplier of automotive systems, was sued by a retirement fund that accused it of misleading investors about quality control shortcomings in its European operations and causing the stock to fall.
The company also failed to inform investors that it had entered into discounted contracts with European customers, according to the complaint in the proposed class-action suit filed today in federal in Manhattan.
Magna shares fell more than 10 percent after an August 2011 conference call with investors in which it disclosed that weak quarterly results were the result of the European operations, according to the suit. Magna reported quarterly net income of $282 million, “significantly less” than Wall Street analysts forecast, according to the complaint.
Tracy Fuerst, a Magna spokeswoman, didn’t immediately respond to phone and e-mail messages seeking comment on the suit.
The case is City of Taylor General Employees Retirement System v. Magna International, 12-3553, U.S. District Court, Southern District of New York (Manhattan).
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