Stock-fraud law firm Kahn Swick & Foti filed a class action against Royal Caribbean Cruises Ltd., charging that the company made a series of materially false and misleading statements related to its business and operations.
Filed Aug. 2 in U.S. District Court in Miami, the lawsuit states that RCCL on July 28 “revealed for the first time that it was performing below expectations and that errors in previous accounting treatment of interest expense relating to its amortization of certain financing fees had resulted in the revision of the company's past financial statements.”
RCCL announced that second-quarter earnings per share of 47 cents were revised to 43 cents because of the accounting error, and that 2011 earnings would be reduced by 20 cents, within a range of $2.85 to $2.95.
“Subsequently, shares of Royal Caribbean fell 13% on July 28, 2011, to below $31 per share on high volume of over 11.32 million shares,” said the law firm.
The suit was filed on behalf of purchasers of RCCL securities between Jan. 27 and July 28, 2011, and it set a filing deadline of Oct. 3 for the class action.
RCCL had no immediate comment on the filing. During the second-quarter earnings call with analysts on July 28, RCCL Chairman and CEO Richard Fain said company officials were “embarrassed about the revision.”
The accounting error, said RCCL, was made in 2009 and was discovered by its internal accounting team.
Kahn Swick & Foti has offices in New York and in Madisonville, La.