NEW YORK – Rosen Law Firm, a global investor rights law firm, has filed a class action lawsuit against Tyson Foods for purchases made between Nov. 23, 2015, and Oct. 7, 2016.
According to the lawsuit, “defendants made false and/or misleading statements and/or failed to disclose that Tyson Foods had conspired to fix chicken prices.”
An antitrust lawsuit, which was filed Sept. 2 by food distributor Maplevale Farms, against Tyson Foods, Koch Foods, Perdue Farms and several other major poultry processors, alleges that the defendants named in the complaint conspired as early as January 2008 to “fix, raise, maintain, and stabilize the price of Broilers…”
The lawsuit alleges that “…The principal (but not exclusive) method by which Defendants implemented and executed their conspiracy was by coordinating their output and limiting production with the intent and expected result of increasing prices of Broilers in the United States. In furtherance of their conspiracy, Defendants exchanged detailed, competitively sensitive, and closely-guarded non-public information about prices, capacity, sales volume, and demand, including through third party co-conspirator Agri Stats.”
The case is Maplevale Farms Inc. v. Koch Foods Inc. et al, case number 1:16-cv-08637, in the U.S. District Court for the Northern District of Illinois.
In addition, Pivotal Research Group LLC, an equity research firm in New York, lowered the price target for Tyson shares to $40 from $100 in early October, according to news reports. The downgrade caused Tyson shares to fall 10 percent by 12:15 p.m. ET, Oct. 6, according to NYSE.com. Other processors also were affected by the news. Pilgrim’s Pride shares retreated 5.05 percent by 12:18, while Sanderson Farms shares declined by 5.37 percent at 12:19.
Pivotal based its decision in part on the antitrust lawsuit. In a market research report advising investors, Pivotal said the lawsuit was “…powerfully convincing…”
“The mechanism for collusion is not a shady meeting in a hotel room, as was once done by players in the lysine market,” Pivotal said. “Rather, the complaint alleges supply collusion occurred through non-public data exchange; detailed industry reports compiled on a daily or weekly basis by Agri Stats, Inc., a subsidiary of Eli Lilly and Co., and then sold back to industry participants.”
Tyson Foods said in a statement to MEAT+POULTRY, “We’re aware of two securities class action suits and will defend ourselves in court if the plaintiffs’ lawyers actually move forward with these cases. These types of lawsuits have, unfortunately, become common in the US legal system. They get filed routinely after sudden declines in publicly reported market prices for a company’s stock. Tyson Foods experienced a sudden drop in stock price after a report by a single stock analyst on Oct. 7.”
While the class action lawsuit has already been filed, Rosen Law Firm is inviting additional plaintiffs to join the suit.