The complaint charges Bare Escentuals and certain of its executives with violations of the Exchange Act. 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, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges 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.
On August 1, 2007, Bare Escentuals announced its financial results for the second quarter of fiscal 2007, the period ended July 1, 2007. That same day, the Company held a conference call with investors and analysts to discuss the Company’s earnings and operations, during which it was revealed that its infomercial sales were weakening. In response to this announcement, the price of Bare Escentuals common stock fell $3.55 per share, or approximately 13%, to close at $24.75 per share, on extremely heavy trading volume.
On October 31, 2007, Bare Escentuals announced its financial results for the third quarter of fiscal 2007, the period ended September 30, 2007. Following the press release, the Company held a conference call with investors and analysts to discuss the Company’s earnings and operations, during which it was revealed that the Company had seen continued weakness in its infomercial business. In response to this announcement, the price of Bare Escentuals common stock fell $2.24 per share, or approximately 8%, to close at $24.70 per share, on extremely heavy trading volume.
Then, on November 26, 2007, the Company announced that President of Wholesale Sales Diane Miles had resigned to “pursue other opportunities, effective immediately,” which resulted in shares of the Company’s stock falling $3.42 per share over the next two trading days, to close at $19.75 per share on November 28, 2007.
On October 15, 2009, Judge Phyllis J. Hamilton granted the motion to consolidate several actions and granted the motion to appoint Westmoreland County Retirement System and Vincent J. Takas as lead plaintiffs and Scott & Scott LLP as lead counsel. On December 23, 2009, the lead plaintiffs filed a Consolidated Complaint adding directors and underwriters of the company as named defendants as well as certain additional claims. On February 11, 2010, the plaintiffs filed a Corrected Consolidated Complaint, correcting the class end date. On February 26, 2010, the defendants filed two motions to dismiss. On September 30, 2010, Judge Hamilton granted in part and denied in part the motion to dismiss.
The plaintiffs have elected not to file an amended complaint. On November 10, 2010, Judge Phyllis J. Hamilton signed the Stipulation and Order of Dismissal and Final Judgment. The lead plaintiffs and the defendants agree that this action is dismissed with prejudice.