Estée Lauder (NYSE: EL) faces legal scrutiny as Schubert Jonckheer & Kolbe LLP investigates potential legal claims regarding alleged false statements about the company's sales practices in China. A federal judge has allowed key claims in a securities class action to proceed, focusing on allegations that Estée Lauder misled investors between February 2022 and October 2023 about its reliance on prohibited gray-market sales through daigou resellers in China.
The investigation highlights significant insider stock sales totaling $306 million during this period. After revelations about China's crackdown on daigou affecting sales, Estée Lauder's stock dropped 19% in November 2023. The law firm is now investigating potential wrongdoing by the company's directors and officers.
Judge allowed securities fraud lawsuit against Estée Lauder to proceed, concerning allegations about hidden reliance on prohibited Chinese gray-market sales.
The ruling by Judge Arun Subramanian of the Southern District of New York represents a significant legal development for Estée Lauder. The court has allowed key claims to proceed in a securities class action alleging the company misled investors about its dependence on prohibited gray-market sales channels in China called "daigou" between February 2022 and October 2023.
The court found sufficient basis that Estée Lauder, its former CEO, and former CFO potentially made false and misleading statements with intent to defraud investors regarding the...
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