Lawsuit claims FedEx misled investors after cyber attack

(WMC Action News 5)
Updated: Jul. 11, 2019 at 6:21 AM CDT
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MEMPHIS, Tenn. (WMC) - A lawsuit claims FedEx violated federal securities laws after a cyber attack.

The suit, which impacts people who purchases FedEx stock in a 15-month period starting in September 2017, alleges that FedEx misguided investors about how fast it would be able to cover costs from the cyber attack that impacted one of its subsidiaries, TNT Express.

The lawsuit was filed by Pomerantz Law Firm out of New York. It claims executives downplayed the impact of the cyber attack in June 2017 of its largest acquisition ever, the $4.8 billion purchase of TNT Express of the Netherlands.

The suit said the cyberattack caused large shipping customers to go with competitors and led to losses by FedEx even though the suit says FedEx assure investors that losses were minimal.

The suit also claims that the integration caused members of the class action lawsuit to purchase FedEx stocks at artificially inflated prices.

FedEx responded to word of the lawsuit with this statement:

“FedEx and certain of its current and former executives have been named as defendants in two putative class action lawsuits purported to be brought on behalf of persons or entities who acquired FedEx common stock during the period from 19 September 2017 through 18 December 2018. The lawsuits allege violations of the U.S. securities laws in connection with the Company’s public disclosures during that period. FedEx intends to vigorously defend itself against these allegations and will respond accordingly.”

The lawsuit is seeking compensatory damages in an amount to be determined at trial.

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