General Motors and its top executives are being sued by a shareholder over the company’s earnings warning earlier this year and its restatement of last year’s results, according to the Associated Press (AP).
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In a lawsuit filed in the Southern District of New York, asset management firm Folksam Asset Management reportedly alleges the company and members of its top management, including chairman and chief executive Rick Wagoner and chief financial officer John Devine, misled investors about the company’s financial performance and its future outlook.
General Motors Acceptance Corp., GM’s financing arm, also was named in the suit, AP added.
The Associated Press said the complaint is seeking class-action status for investors who purchased GM stock and bonds between February 2002 and March 2005 and the lawsuit wants Wagoner and Devine to pay back their bonuses for 2004.
AP noted that, in March, GM warned that it expected to post a first-quarter loss and lower-than-expected annual profits, citing disappointing sales and a tough competition on prices.
The company also said in a filing with the Securities and Exchange Commission that it would restate its 2004 financial results, the report added.
The Associated Press noted that GM has since stopped issuing public financial forecasts, announced the elimination of 25,000 jobs by 2008 and had its bonds downgraded to junk by two major credit agencies.
