Nissan Facing Securities Lawsuit in the Wake of Executives’ Arrests Over False Financial Filings [UPDATE]
by Erin Shaak
Last Updated on April 29, 2022
Jackson County Employees’ Retirement System v. Ghosn et al.
Filed: December 10, 2018 ◆§ 3:18-cv-01368
Nissan Motor Co., Ltd. is among the defendants in a proposed class action that claims the auto manufacturer deceived investors by understating the amount of compensation it paid recently arrested former CEO Carlos Ghosn over the past decade.
Tennessee
Case Updates
April 26, 2022 – Nissan Agrees to $36M Settlement
Nissan has agreed to settle the claims detailed on this page as part of a $36 million deal that aims to compensate shareholders.
According to an April 22 memo, the settlement looks to cover anyone who, between May 11, 2014 and November 16, 2018, purchased or otherwise acquired Nissan American depository receipts (ADRs) on the over-the-counter market or purchased or otherwise acquired Nissan common stock.
If approved, the settlement will allow those covered to file a claim for a pro-rated share of the settlement fund. Each payment will be at least $10 and will be based on each shareholder’s recognized losses.
Notice of the settlement will be sent by direct mail to class members who can be identified with “reasonable effort,” according to the memo. A settlement notice will also be published once in The Wall Street Journal and once over a national newswire service.
An official settlement website, www.NissanSecuritiesLitigation.com, will also be set up to provide more information on the deal and allow those covered to file claims. The website was not yet live at the time this update was posted.
The plaintiffs’ counsel praised the deal as “a very good result” for Nissan shareholders under the circumstances.
The settlement now awaits the judge’s preliminary stamp of approval. If and when the deal is approved, those covered should start keeping an eye on their mailboxes for a settlement notice.
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Nissan Motor Co., Ltd. is among the defendants in a proposed class action that claims the auto manufacturer deceived investors by understating the amount of compensation it paid recently arrested former CEO Carlos Ghosn over the past decade.
Filed against Nissan, Ghosn, former board member Greg Kelly, and several other executives, the lawsuit alleges Nissan has concealed half of Ghosn’s salary in order to evade investor scrutiny. Despite reporting that the former CEO earned one billion yen each year—a scheme the suit says was masterminded by Kelly—Nissan, the case charges, paid Ghosn an additional one billion yen in the form of deferred compensation that was omitted from the company’s financial reports. All told, according to the lawsuit, Nissan, unbeknownst to investors, underreported Ghosn’s true pay over the last 10 years by roughly 10 billion yen.
Nissan’s misreporting, the lawsuit alleges, led investors to believe not only that the company earned more profits during the past decade than it actually earned, but that the automaker had in place adequate internal controls and governance. The allegedly false information fed to investors allowed Nissan’s shares to trade at artificially inflated prices, the case says.
The truth was revealed on November 19, 2018, the complaint continues, when investors learned that Ghosn and Kelly had been arrested in Japan for violating a law related to financial filings. Upon this news, the price of Nissan American Depository receipts (ADRs) allegedly dropped by more than five percent, injuring the company’s investors.
The suit seeks to cover anyone who purchased Nissan American Depositary Receipts (ADRs) between December 10, 2013 and November 16, 2018.
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