FinancialsMay 17, 2024
Richemont Appoints Van Cleef & Arpels’ Nicolas Bos as New CEOThe announcement coincided with its full-year results, with growth driven by its jewelry brands.
MajorsJun 25, 2019
Judge Denies Signet’s Motion in Securities Fraud Lawsuit
Signet Jewelers sought to have one of the two claims brought against it by shareholders in a 2016 suit dismissed.
New York—Earlier this month, a New York federal judge denied Signet Jewelers Ltd.’s request to dismiss one of the two claims contained in a lawsuit brought against it by shareholders.
The Public Employees’ Retirement System of Mississippi, a pension fund, is the lead plaintiff in a purported securities class-action against Signet originally filed in 2016.
The lawsuit accuses the jewelry retailer of misrepresenting two aspects of the company: the health of its credit portfolio (which the company has since outsourced) and allegations of a culture of “pervasive” sexual harassment.
The sexual harassment aspect of the shareholder lawsuit relates to Jock, et al. v. Sterling Jewelers Inc., a subsidiary of Signet. That case was filed in March 2008 by several women accusing the company of discriminatory pay and promotion practices based on their gender.
Though the case itself contains no allegations of sexual harassment, documents eventually unsealed in connection to the case, and reported on by The Washington Post as well as other media outlets, painted a picture of a culture where women were objectified, disrespected and scared of retaliation, generating a lot of negative publicity for the retailer and, the shareholders noted in their lawsuit, sending Signet’s stock price plummeting.
Signet previously sought to have the entire shareholder lawsuit dismissed, but U.S. District Court Judge Colleen McMahon denied that motion in November 2018.
In May 2019, the retailer sought the dismissal of the claims relating to its company culture. It filed a motion for a judgement on the pleadings, which is when a party asks the court to rule in its favor based not on new evidence but interpretation of the law.
Signet asked the court to take a look at a March ruling from the Second Circuit Court of Appeals in a case called Singh v. Cigna Corp.
In that case, a shareholder alleged that Cigna’s pamphlet about its code of ethics misled investors about its compliance with Medicare regulations, court documents show.
The code of ethics, which included statements about staying in compliance with the law and acting with integrity, was determined to be a “textbook example of puffery,” court papers state, meaning the statements were too general for a reasonable investor to take into consideration when buying shares of the company.
Signet argued in its motion for a judgement on the pleadings that its code of conduct should be viewed in the same manner, but Judge McMahon disagreed and
in a June 11 ruling denied its request to have a portion of the investor lawsuit dismissed.
In her ruling, the judge wrote that statements included in a company’s code of conduct can be specific enough for investors to rely upon when deciding to invest in a company.
The judge also noted that the Singh v. Cigna decision did not mean that all company codes of conduct were now “inactionable” and highlighted the importance of context.
McMahon summarized the plaintiff’s argument, stating: “In the face of a credible accusation (by way of another lawsuit) that Signet suffered from rampant sexual harassment … defendants sought to reassure the investing public that Signet did not, in fact, have a toxic workplace.”
The judge pointed to examples of Signet’s public reassurances, including its denial of the allegations in its SEC filings; its affirmations that hiring decisions were made based on merit, that misconduct would be disciplined, and that sexual harassment could be reported without fear of retaliation; and its assurance that its senior executives were held to high standards.
“As alleged, a reasonable investor—who otherwise would be concerned about how grave allegations concerning rampant sexual misconduct might affect her investment in Signet—took defendants at their word,” McMahon wrote. “As alleged, their word was not truthful.”
Signet’s attorneys requested last Tuesday that the judge reconsider due to alleged factual errors, including errors about when the code of conduct was published in relation to the Jock case.
McMahon denied that motion Thursday, stating that the court did not rely on factual inaccuracies or mischaracterizations.
“The problem for defendants is that …. Signet’s codes of conduct and ethics—again, reincorporated by reference in Signet’s SEC filings and posted on Signet’s website after Jock was filed—touted certain values and practices that constitute the exact opposite of what the company allegedly valued and practiced,” she wrote.
The securities fraud case against Signet is still in pre-trial proceedings and the court has not officially certified it as a class action.
Signet Jewelers declined to comment on the judge’s ruling, saying it does not comment on pending legal matters.
The investors’ counsel did not respond to request for comment.
In her ruling, the judge wrote that statements included in a company’s code of conduct can be specific enough for investors to rely upon when deciding to invest in a company.
The judge also noted that the Singh v. Cigna decision did not mean that all company codes of conduct were now “inactionable” and highlighted the importance of context.
McMahon summarized the plaintiff’s argument, stating: “In the face of a credible accusation (by way of another lawsuit) that Signet suffered from rampant sexual harassment … defendants sought to reassure the investing public that Signet did not, in fact, have a toxic workplace.”
The judge pointed to examples of Signet’s public reassurances, including its denial of the allegations in its SEC filings; its affirmations that hiring decisions were made based on merit, that misconduct would be disciplined, and that sexual harassment could be reported without fear of retaliation; and its assurance that its senior executives were held to high standards.
“As alleged, a reasonable investor—who otherwise would be concerned about how grave allegations concerning rampant sexual misconduct might affect her investment in Signet—took defendants at their word,” McMahon wrote. “As alleged, their word was not truthful.”
Signet’s attorneys requested last Tuesday that the judge reconsider due to alleged factual errors, including errors about when the code of conduct was published in relation to the Jock case.
McMahon denied that motion Thursday, stating that the court did not rely on factual inaccuracies or mischaracterizations.
“The problem for defendants is that …. Signet’s codes of conduct and ethics—again, reincorporated by reference in Signet’s SEC filings and posted on Signet’s website after Jock was filed—touted certain values and practices that constitute the exact opposite of what the company allegedly valued and practiced,” she wrote.
The securities fraud case against Signet is still in pre-trial proceedings and the court has not officially certified it as a class action.
Signet Jewelers declined to comment on the judge’s ruling, saying it does not comment on pending legal matters.
The investors’ counsel did not respond to request for comment.
More on Majors
The Latest
FinancialsMay 17, 2024
Watches of Switzerland’s Fiscal-Year Sales Flat Looking ahead, the retailer said it sees “enormous potential” in Roberto Coin’s ability to boost its branded jewelry business.
Recorded WebinarsMay 17, 2024
Watch: Preparing for Trade Show SuccessJewelry trade show veterans share strategies for engaging buyers, managing your time effectively, and packing the right shoes.
Brought to you by
Record Gold Prices Have Consumers Undeterred. Here’s Why.Despite the rising prices, consumers continue to seek out the precious metal.
AuctionsMay 17, 2024
Piece of the Week: Cartier’s Ring-Tailed LemurThis little guy’s name is Ricky and he just sold for more than $200,000 at Sotheby’s Geneva jewelry auction.
Weekly QuizMay 16, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
AuctionsMay 16, 2024
Christie’s Holds 2 Sales Despite CyberattackThough its website has been down for a week, Christie’s proceeded with its jewelry and watch auctions on May 13-14, bringing in nearly $80 million.
AuctionsMay 16, 2024
Sotheby’s Withdraws 101-Carat Yellow Diamond from AuctionDespite the absence of “The Allnatt,” Sotheby’s Geneva jewelry auction totaled $34 million, with 90 percent of lots sold.
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
ColumnistsMay 16, 2024
The PR Adviser: What the Designer Should’ve DoneLilian Raji gives advice to designers on how to make the most of great publicity opportunities.
SourcingMay 16, 2024
Lucapa to Shed Stake in Lesotho Diamond Mine The mining company wants to divest its 70 percent holding in the Mothae Diamond Mine in an effort to streamline its portfolio.
ColumnistsMay 15, 2024
Squirrel Spotting: Why Retailers Struggle to Fire BrandsWhy do so many jewelers keep lines that are not selling? Peter Smith thinks the answer lies in these two behavioral principles.
AuctionsMay 15, 2024
Red Diamond Breaks Records at Phillips GenevaThe “Argyle Phoenix” sold for more than $4 million at the auction house’s second jewels sale.
Events & AwardsMay 15, 2024
See Who’s in JA’s 2024 ‘20 Under 40’ ClassThe annual list recognizes young professionals making an impact in jewelry retail.
IndependentsMay 15, 2024
David Mann Jewelers in Upstate NY to Close After 35 YearsOwner David Mann is heading into retirement.
FinancialsMay 15, 2024
Brilliant Earth’s Sales Fall Flat in Q1 While overall sales were sluggish, the retailer said its non-bridal fine jewelry was a popular choice for Valentine’s Day.
SourcingMay 14, 2024
Anglo American Confirms It Is Looking to Sell De Beers The mining giant also wants to offload its platinum business as part of an overhaul designed to “unlock significant value.”
AuctionsMay 14, 2024
2 Huge Yellow Diamonds Are Heading to AuctionChristie's is selling one of the diamonds, moving forward with its Geneva jewelry auction despite the cyberattack that took down its website.
GradingMay 14, 2024
Instappraise Adds Trifold Brochure to Appraisal OfferingsRetailers can customize and print the appraisal brochures from their store.
Lab-GrownMay 13, 2024
Lab-Grown Diamond Brand Lightbox Cuts Prices by 25 to 40%The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
TechnologyMay 13, 2024
Christie’s Website Brought Down by Hackers, Watch Auction Postponed The site has been down since Thursday evening, just ahead of its spring auctions.
AuctionsMay 13, 2024
Madeleine Albright’s Jewelry, Pins a White-Glove Sale at Freeman’s | HindmanThe late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
IndependentsMay 13, 2024
Zachary’s Jewelers Names Mother’s Day Jewelry Contest WinnersThree fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
IndependentsMay 10, 2024
Frank Adams Jewelers Names New CEOKimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
CollectionsMay 10, 2024
Piece of the Week: Carina Hardy’s ‘Birth of Venus’ NecklaceAs a token of womanhood, this necklace depicts when Venus was born from the sea.
TrendsMay 09, 2024
Amanda’s Style File: Shine Bright, Moms Show your mother some love with a piece of fine jewelry.
IndependentsMay 09, 2024
Kyle Edward Fine Jewelry to Close Salisbury StoreThe company’s Easton location will remain open.
MajorsMay 09, 2024
JBT Elects New ChairmanBrian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
