In re RH, Inc. Securities Litigation
|Court:||United States District Court for the Northern District of California|
|Judge:||Hon. Yvonne Gonzalez Rogers|
|Class Period:||03/26/2015 - 06/08/2016|
|Case Contacts:||David R. Stickney, Jonathan D. Uslaner, Brandon Marsh, Robert Trisotto|
Securities fraud class action filed on behalf of all purchasers of RH (formerly Restoration Hardware Holdings, Inc.) common stock between March 26, 2015 and June 8, 2016, inclusive (the “Class Period”), alleging claims pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 against RH and two of its top officers, Gary Friedman (its long-time CEO and Board Chairman) and Karen Boone (RH’s Co-President and CFO).
The case commenced on February 2, 2017. On April 26, 2017, the Court appointed the Public School Teachers’ Pension & Retirement Fund of Chicago and Arkansas Teacher Retirement System as Lead Plaintiffs for the Class and BLB&G as Lead Counsel. On June 12, 2017, Lead Plaintiffs filed the operative Complaint on behalf of purchasers of RH common stock between March 26, 2015 and June 8, 2016.
Defendants filed a motion to dismiss the Complaint, which Lead Plaintiffs opposed. The Court held a hearing regarding the motion on October 31, 2017. On February 26, 2018, the court denied Defendants’ motion to dismiss. Defendants filed their answer on April 10, 2018. Plaintiffs filed their motion for class certification on June 22, 2018. On October 11, 2018, the Court issued a written order granting the motion.
The parties are currently engaged in discovery. Under the current case schedule, fact discovery must be completed by January 31, 2019; and expert discovery must be completed by April 22, 2019. All dispositive motions are due by May 14, 2019.
The Complaint alleges that RH and certain of its top officers made false and misleading statements to investors, and omitted material facts, regarding the launch of RH’s new product line, RH Modern, and the Company’s inventory levels. In response to Defendants’ statements, the price of RH’s shares traded at artificially-inflated levels, reaching a high of $106.49 per share during the Class Period. When the truth emerged in a series of partial disclosures, the price plunged to less than $27 per share.
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