Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) ( http://www.rgrdlaw.com/cases/tileshop/) today announced that a class action has been commenced in the United States District Court for the Southern District of New York on behalf of purchasers of Tile Shop Holdings, Inc. (“Tile Shop”) (NASDAQ:TTS) common stock during the period between August 22, 2012 and November 13, 2013 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from November 15, 2013. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/tileshop/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Tile Shop and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Tile Shop is a specialty retailer of manufactured and natural stone tiles, setting and maintenance materials, and related accessories in the United States.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects and failed to disclose adverse facts, including that Tile Shop had been acquiring the vast majority of its product from China, paying below-market prices for product that contained dangerously high lead levels, and that Tile Shop had acquired 8.3% of its product sold in fiscal 2011, 16.3% of its product sold in fiscal 2012, and 32.2% of its product sold in fiscal 2013 from a Chinese supplier that was owned and operated by the brother-in law of Tile Shop’s Chief Executive Officer (“CEO”). The complaint also alleges that defendants concealed that Tile Shop had been using captive, phantom suppliers to overstate inventories, understate cost of sales and overstate gross profits in its Class Period financial reports. Due to these false statements and omissions, Tile Shop was able to complete secondary public stock offerings on December 12, 2012 and June 5, 2013 at artificially inflated prices.