Secaucus, N.J., Children’s Place Retail Stores Inc. disclosed Monday it is the target of a class-action lawsuit alleging the apparel company misled shareholders.
In a filing with the Securities and Exchange Commission, the retailer said the lawsuit, filed Sept. 21, alleges the company and current and former executives made statements that misrepresented or omitted certain facts about the business. Those misleading statements illegally and artificially inflated the company’s stock price, according to the suit.
The complaint, filed in the U.S. District Court for Southern District of New York, seeks monetary damages and interest, as well as costs involved in the suit.
Last Wednesday, the company asked chief executive Ezra Dabah to resign after an internal probe found he violated internal policies for securities trades. He remains a member of the board and must reimburse the company for out-of-pocket costs related to the investigation. Director Chuck Crovitz was named interim CEO the same day.
The company also stripped former chief creative officer Nina L. Miner of her role as an officer after a probe found she unintentionally violated the company’s code of business conduct related to expense reimbursement practices.
The company said last week it will delay its annual report and other overdue regulatory filings as a result of the leadership change.