Shareholder Investigation of Ascena Retail
Ascena Retail Group, Inc. (ASNA) Accused of Misleading Investors
According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1933 between September 16, 2015 and June 8, 2017, Ascena Retail Group, Inc. (ASNA) touted its acquisition of ANN Inc. as positive and having potential for continued growth. However, Ascena’s acquisition of ANN Inc. was a complete disaster due to ANN Inc.’s poor business operations. This information was hidden from investors as Ascena concealed the reality of ANN Inc.’s condition by improperly delaying their recognition of an impairment charge made on the value of ANN Inc.’s goodwill. This resulted in materially overstated financial results, including the overvaluing of declining ANN Inc. brands. Despite the adverse facts about the acquisition, Ascena executives continued to mislead investors by positively assuring the viability and growth of the company following the acquisition of ANN Inc. On May 17, 2017, Ascena issued a press release that reported their entire fiscal year’s sales, revealing a 6-7% drop despite the positive assurances of Ascena executives. On this news, the price of Ascena stock dropped from $2.82 per share to $2.06 a share, a 26% decline. The stock never recovered and now trades at under $1.00.
Ascena Retail Group, Inc. (ASNA) Shareholders Have Legal Options
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