New Orleans Employees’ Retirement System, et al. v. Mattel, Inc., et al.

Court: United States District Court for the Central District of California
Case Number: 2:20-cv-01056
Class Period: 08/02/2017 - 08/08/2019
Case Leaders: John Rizio-Hamilton, Jonathan D. Uslaner, Hannah Ross
Case Team: Richard D. Gluck, Lauren M. Cruz, Matthew Traylor

On January 31, 2020, Bernstein Litowitz Berger & Grossmann filed a class action lawsuit for violations of the federal securities laws in the U.S. District Court for the Central District of California against Mattel, Inc. (“Mattel” or the “Company”), certain of the Company’s former and current senior executives, and its auditor, PricewaterhouseCoopers LLP (collectively, “Defendants”), on behalf of investors in Mattel common stock between August 2, 2017 and August 8, 2019 (the “Class Period”).

Mattel is one of the world’s largest toy companies. The claims alleged in this case arise from recent disclosures revealing that the Company engaged in a deliberate accounting fraud by improperly valuing $109 million in tax expenses and then working with the Company’s auditor, PricewaterhouseCoopers LLP (“PwC”), to conceal this misstatement and avoid both restating the Company’s previously reported financial results and admitting a weakness in internal controls. As described by a whistleblower cited in a recent report by The Wall Street Journal, the Company’s senior accounting executives—including Mattel’s former CFO—engaged in this “coverup” because disclosing the truth and revealing a material weakness in internal controls would have been a “kiss of death.”

Ultimately, in response to a second whistleblower complaint disclosed on August 8, 2019, the Company was forced to admit to serious deficiencies in internal controls, restate its previously reported financial results, fire its CFO, and concede that “lapses in judgment by management contributed to these failures.” As a result of the disclosures of the whistleblower allegations concerning this misconduct, Mattel shares plummeted in value, causing Mattel investors to suffer significant losses and damages.

The complaint is based on an extensive investigation and a careful evaluation of the merits of this case.  To view the complaint, click on the Case Documents tab on the left-hand side of the page. BLB&G filed this action on behalf of the New Orleans Employees’ Retirement System, and the case is captioned New Orleans Employees’ Retirement System v. Mattel, Inc., No. 2:20-cv-01056 (C.D. Cal.). This case is related to a previously-filed securities class action pending against Mattel: Houston Municipal Employees Pension System v. Mattel, Inc., No. 2:19-cv-10860 (C.D. Cal.).

On April 21, 2020, the Court appointed New Orleans Employees’ Retirement System and Dekalb County Employee Retirement System Lead Plaintiffs in the securities action against Mattel, and BLB&G was appointed Lead Counsel. On May 29, 2020, Lead Plaintiffs filed their Amended Complaint. On July 28, 2020, Defendants moved to dismiss the Amended Complaint, and Lead Plaintiffs filed their opposition to Defendants’ motion to dismiss on September 25, 2020. On January 26, 2021, the Court denied Defendants’ motions to dismiss. The Parties are currently engaging in discovery.