NYPD pension fund sues Amazon over ‘artificially inflated’ stock prices

Jul 13, 2022, 6:00 AM

People walk by an Amazon Go store at the Inc. headquarters on May 20, 2021 in Seattle, W...

People walk by an Amazon Go store at the Inc. headquarters on May 20, 2021 in Seattle, Washington. (Photo by David Ryder/Getty Images)

(Photo by David Ryder/Getty Images)

The pension fund for thousands of New York City police detectives has filed a lawsuit against Amazon in federal court, claiming the company and its executives misled investors and hid losses spurred by the company’s “excessive” expansion during the coronavirus pandemic.

According to the suit, the Detectives’ Endowment Association (DEA) Annuity Fund contends it purchased nearly $3 million in shares of Amazon stock “at artificially inflated prices” before the company eventually revealed $3.8 billion of losses in 2022’s first-quarter earnings report.

“Defendants failed to disclose and actively concealed from investors that rather than being necessary to meet short- and long-term demand, Amazon’s escalated and rapid expansion had created an expensive and unnecessary over-expansion situation that exposed Amazon to massive losses that threatened to cause, and did cause, the material and significant depletion of its earnings,” the lawsuit read.

New York appeals court dismisses AG suit against Amazon

The reported first-quarter losses drove shares down approximately 10% in after-hours trading.

Amazon CEO Andy Jassy, CFO Brian Olsavsky, and Head of Investor Relations David Fildes are listed as the primary defendants in the case.

The police pension fund filed the suit as a class action on behalf of all “persons and entities that acquired Amazon common stock between July 30, 2021 and April 28, 2022.”

Amid Amazon’s significant losses — the first time the company had quarterly losses since 2015 — the head of Amazon’s consumer business, Dave Clark, stepped down July 1 to “pursue other opportunities,” according to an Amazon press release. He left just six weeks after the company’s losses were published.

In an effort to maintain artificially high market prices, the lawsuit claims Amazon employed devices, schemes, and artifices to defraud while making untrue statements about the value of the stock.

“Had [the] plaintiff and the other members of the class known the truth regarding Amazon’s financial results, which was not disclosed by [the] defendants, [the] plaintiff and other members of the class would not have purchased or otherwise acquired their Amazon common stock, or, if they had acquired such securities during the class period, they would not have done so at the artificially-inflated prices that they paid,” the suit read.

Alongside the suit, a coalition of labor unions also filed a complaint with the U.S. Securities Exchange Commission last week, contending Amazon misled investors by publicly sharing “cherry-picked and outdated data” about its warehouse injury rates last spring, according to Geekwire.

Amazon has declined to comment on the situation.

MyNorthwest News

Photo: Medics respond to a crash in SeaTac on June 21, 2024....

Julia Dallas

3 nearly lose their lives, another injured in SeaTac crash

Five people and two cars were involved in a violent car crash in SeaTac on Friday, the King County Sheriff's Office told KIRO Newsradio.

22 minutes ago

Photo: Lacey police are investigating a deadly shooting....

KIRO 7 News Staff

21-year-old arrested in Lacey double murder after police chase

A 21-year-old man led police on a chase following the murder of two people whom he lived with in Lacey.

39 minutes ago

Photo: The exterior of the Boeing Company headquarters on March 25, 2024....

James Lynch

Boeing working with DOJ to avoid criminal charges

After allegedly violating the terms of a 2021 deferred prosecution agreement, Boeing is reportedly working to avoid a criminal trial.

3 hours ago

Photo: Yin May suffered severe injuries when she was hit by a driver in Kent....

Julia Dallas

Deputies searching for person who hit, nearly killed woman in Kent

King County deputies are looking for the person who almost killed a woman in Kent in a hit-and-run on Sunday.

5 hours ago

Photo: Snohomish County bus....

Bill Kaczaraba

Attacks against Community Transit drivers reveal potential troubling trend

Community Transit drivers in Snohomish County face a growing threat from violent passengers. Two drivers have been attacked recently.

5 hours ago

Image: A Seattle Police Department vehicle is parked outside Lumen Field in Seattle....

Steve Coogan

Report: Seattle officer fired after previous racist comments surfaced

A Seattle Police Department officer was fired for calling his neighbor racist and sexist slurs and making other comments in 2022.

6 hours ago

NYPD pension fund sues Amazon over ‘artificially inflated’ stock prices