NEW YORK, July 16, 2024 (GLOBE NEWSWIRE) -- Bleichmar Fonti & Auld LLP (“BFA”) announces that it has filed a class action lawsuit for violations of the federal securities laws against CAE Inc. (“CAE” or the “Company”) and certain of the Company’s senior executives. The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of investors in CAE who purchased or acquired CAE stock on an exchange in the United States between February 11, 2022 and May 21, 2024 inclusive (the “Class Period”). The case is pending in the U.S. District Court for the Southern District of New York and is captioned Norbert Gamache v. CAE Inc., et al., No. 1:24-cv-05360. A copy of the lawsuit can be found here: https://www.bfalaw.com/siteFiles/Cases/CAEComplaint.pdf.
If you suffered a loss on your CAE investment and would like to discuss this matter, please submit your information at https://www.bfalaw.com/cases/cae-inc-investigation.
You can also contact Ross Shikowitz, Esq., at 212-789-3619, or by email to ross@bfalaw.com.
Why was CAE Sued for Securities Fraud?
The complaint alleges that, throughout the Class Period, defendants made materially false and misleading statements concerning significant cost overruns in CAE’s Defense and Security (“Defense”) segment caused by several fixed-price, long-term Defense contracts entered prior to the COVID-19 pandemic. In truth, certain of CAE’s pre-COVID fixed-price Defense contracts had experienced such significant cost overruns that the Company needed to take over $720 million in charges and profit adjustments and “re-baselin[e]” its entire Defense business.
On August 10, 2022, the Company announced $28.9 million in unfavorable contract profit adjustments involving two fixed-price contracts. On this news, the price of CAE stock declined $4.32 per share, or more than 16%, from $25.80 per share on August 9, 2022, to $21.48 per share on August 10, 2022.
Defendants, however, continued to make false representations regarding the strength of the Defense segment. For instance, the Company assured investors that “[n]otwithstanding the additional volatility” from “acute short-term headwinds for the Defense sector, management maintains a highly positive view of its growth potential over a multi-year period.”
On November 14, 2023, CAE stated that certain legacy contracts continued to be plagued by cost overruns. CAE revealed that, within the Defense segment, the Company planned to “retir[e] legacy contracts, which have been most affected by inflationary pressures.” On this news, the price of CAE stock declined $0.85 per share, or nearly 4%, from $21.92 per share on November 13, 2023, to $21.07 per share on November 14, 2023.
Three months later, on February 14, 2024, CAE announced that it “sought to further accelerate the retirement of outstanding program risks, mainly associated with certain legacy Defense contracts that we entered into pre-COVID and have been most impacted by economic headwinds.” On this news, the price of CAE stock declined $2.01 per share, or nearly 10%, from $20.92 per share on February 13, 2024, to $18.91 per share on February 14, 2024.
Finally, after the close of trading on May 21, 2024, CAE announced a “re-baselining of its Defense business, Defense impairments, [and] accelerated risk recognition on Legacy Contracts.” The Company stated that “CAE has recorded a $568.0 million non-cash impairment of Defense goodwill,” “$90.3 million in unfavorable Defense contract profit adjustments as a result of accelerated risk recognition on the Legacy Contracts,” and a “$35.7 million impairment of related technology and other non-financial assets which are principally related to the Legacy Contracts.” On this news, the price of CAE stock declined $1.03 per share, or more than 5%, from $19.83 per share on May 21, 2024, to $18.80 per share on May 22, 2024.
What are my Rights?
If you purchased or acquired CAE stock on an exchange in the United States between February 11, 2022 and May 21, 2024, inclusive, you may ask the Court no later than September 16, 2024, which is the first business day after 60 days from the date of the publication of this notice, to appoint you as Lead Plaintiff through counsel of your choice. To be a member of the Class, you need not take any action at this time. The ability to share in any potential future recovery is not dependent on serving as Lead Plaintiff.
Submit your information here: https://www.bfalaw.com/cases/cae-inc-investigation.
Why BFA Law?
Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd. For more information about BFA and its attorneys, please visit https://www.bfalaw.com.
