NEW YORK (
stock spiked on Monday after its CEO upped its stake in the company.
Dov Charney bought 1.8 million shares, raising his stake to about 54%. Shares of the t-shirt retailer surged 11% to $1.01 in morning trading.
The move comes as Charney is facing two sex suits. The notorious exec was accused earlier in the month for allegedly forcing himself on a teen employee and holding her as a "sex slave."
But last week a judge said that she may dismiss the case and instead allow it to be heard in arbitration, which could keep details from becoming public and limit potential damage to the company.
Separately, a former employee filed a suit last week, claiming that Charney sent her sexual text messages. In a filing, Kimbra Lo said Charney later forced himself on her during a discussion at his home regarding a modeling and photography job.
American Apparel has been facing severe operating issues as well. Under the scrutinizing eye of Wall Street, the company hired a new chief financial officer in February as it faces a prolonged sales decline. The company's problems have ranged from a possible covenant breach to immigration probes and charges from its accountant that it withheld vital information.
--Written by Jeanine Poggi in New York.
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