Bare Escentuals Faces Class Action Lawsuit

2009-07-20 | 08:12

Suit alleges the company failed to disclose true financial condition.

Apparently some investors never read the warning, "Past results are no guarantee of future performance."

The law firm of Izard Nobel LLP has filed a lawsuit seeking class action status in the United States District Court for the Northern District of California on behalf of those who purchased the common stock of Bare Escentuals, Inc. between November 7, 2006 and November 26, 2007.

The Complaint charges that Bare Escentuals and certain of its officers and directors violated federal securities laws. Bare Escentuals, together with its subsidiaries, engages in the development, marketing, and sale of cosmetics, and skin care and body care products under BareMinerals, RareMinerals, Buxom, and MD Formulations brands worldwide.

The complaint alleges that defendants failed to disclose material adverse facts about the company's true financial condition, business and prospects. Specifically, it is alleged that defendants failed to disclose the following adverse facts, among others: (i) that the company's infomercial business was not performing according to internal expectations and would need to be substantially revamped; (ii) that the company's new infomercial had led to an immediate decrease in sales and was not performing to internal expectations; and (iii) as a result, the company's growth rate would be slowing from historical growth rates.