Royal Caribbean Sued Over “False and Misleading Statements”
Last month, Royal Caribbean revealed a pretty significant accounting error related to its amortization of some financing fees (interest expense) that forced it to revise its earlier financial statements. This drove second quarter EPS of 47 cents to 43 cents. As a result, Royal Caribbean shares fell 13% on the day it made the “boo boo” announcement to below $31 a share on high volume of over 11.32 million shares.
As a result, Royal Caribbean and certain of its officers and directors are charged with making a series of materially false and misleading statements related to the Company’s business and operations in violation of the Securities Exchange Act of 1934.
RC Chairman Richard Fain said last week he was “embarrassed” by the error, which was made in 2009 and discovered by the company’s internal accounting team. The company said though it revised its past financial statements, it did not restate its prior earnings, and claimed the statements could still be relied upon. Uh huh.
Law firm Kahn Swick & Foti, LLC has filed the class action suit against Royal Caribbean on behalf of purchasers of the securities of Royal Caribbean between January 27, 2011 and July 28, 2011 in a Miami court as of last week.