According to the complaint filed November 09, 2009, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company improperly recorded certain advertising costs as prepaid advertising rather than recording the cost as an expense; (2) that the Company improperly accounted for intercompany accounts receivable associated with its wholly owned insurance subsidiaries; (3) that, as a result, the Company’s financial results were overstated during the Class Period; (4) that the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (5) that the Company lacked adequate internal and financial controls; and (6) that, as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On June 10, 2010, the Court issued an Order Consolidating Actions, Appointing Lead Plaintiff and Approving Selection of Counsel.
On August 9, 2010, a Consolidated Amended Class Action Complaint for Violations of the Federal Securities Laws against the defendants was filed by the lead plaintiffs.
On April 7, 2011, the Court granted the Defendants’ Motion to Dismiss. The Plaintiffs’ Amended Complaint was dismissed without prejudice.
On May 23, 2011, the plaintiffs filed an Amended Consolidated Class Action Complaint.
According to a press release dated August 2, 2011, Weil, Gotshal and Manges helped secure dismissal, with prejudice, of a purported shareholder’s class action brought against jewelry retailer Zale Corporation and certain of its officers and directors in federal court in Texas. ... In her ruling on the Zale defendants’ motion, issued August 1, 2011, US District Judge Jane L. Boyle found that the accounting problems that led to the restatement were more the result of the former executive trying to meet a department budget rather than an attempt to “initiate companywide fraud.” She agreed with defendants that, because plaintiffs had failed to plead scienter with respect to the action of the former executive, who was later fined by the SEC over the alleged accounting problems, scienter could not, therefore, be imputed onto the corporation or any of the individual defendants.
On August 30, 2011, the plaintiff filed a motion to alter or amend the judgment entered on August 2, 2011. The motion was denied by Judge Jane J. Boyle on August 31, 2011.
On September 29, 2011, the plaintiffs filed a Notice of Appeal to the Fifth Circuit Court of Appeals.
On November 30, 2012, the Fifth Circuit Court of Appeals affirmed the Northern District of Texas' dismissal order in this case.