Norwegian Cruise Lines and its CEO and CFO are the defendants in a proposed securities class action lawsuit wherein an investor alleges the parties issued “unproven and/or blatantly false statements” about COVID-19 in order to entice customers into purchasing cruises and/or prevent cancellations.
The lawsuit, which looks to represent those who bought or otherwise acquired Norwegian Cruise Lines securities between February 20 and March 12, 2020, says the company misleadingly discussed in its February 20 Form 8-K filed with the Securities and Exchange Commission “positive outlooks” despite the COVID-19 outbreak. Norwegian told investors, in part, that despite the impact of COVID-19 that was known at the time, the company’s booked position “remained ahead of prior year and at higher prices on a comparable basis,” according to the complaint. Further, Norwegian also touted to investors several proactive procedures in place to protect guests and crew, the suit adds.
Filed in Florida, the lawsuit leans on multiple media reports that detail that Norwegian Cruise Line managers told sales staff, relying on scripted answers, false assurances and outright misstatements, to lie to customers with regard to COVID-19. One report on which the case leans is a March 11, 2020 Miami New Timespiece titled “Leaked Emails: Norwegian Pressures Sales Team to Mislead Potential Customers About Coronavirus.” According to the lawsuit, the release of the article—which detailed that Norwegian essentially asked sales staff to lie to customers in order to protect cruise bookings—saw the company’s stock fall by $5.47 per share, or approximately 26.7 percent.
On March 12, the Washington Post published an article detailing Norwegian’s alleged spread of coronavirus-related falsehoods in an attempt to protect its bottom line. The lawsuit says the article “revealed even more” about Norwegian’s sales tactics amid the COVID-19 outbreak, and noted that “company leaders are trying to find out who shared the emails.” Upon this news, the suit says, Norwegian’s stock price fell a further $5.38, or roughly 35.8 percent, injuring investors.
All told, the lawsuit alleges the statements issued by the defendants in February 2020 were “materially false and/or misleading” given what news reports say was going on behind the scenes with sales staff attempting to keep cruises booked. The 16-page case claims that as a result of the defendants’ misconduct, statements concerning Norwegian’s business and operations were materially false and the lives of customers and crew members were put at risk.
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