evan r. hoey

Evan R. Hoey | People | Kessler Topaz

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EVAN R. HOEYASSOCIATED 484.270.1438F 610.667.7056

[email protected]

FOCUS AREASSecurities Fraud

EDUCATIONArizona State UniversityB.A. 2014, summa cum laude

Temple University Beasley School of LawJ.D. 2017, cum laude

ADMISSIONSPennsylvania

USDC, Eastern District of Pennsylvania

Evan Hoey, an associate of the Firm, focuses his practice in securities litigation.

Ongoing Cases Acuity Brands, Inc.

CASE CAPTION In re Acuity Brands, Inc. Securities Litigation

COURTUnited States District Court for the Northern District of Georgia

CASE NUMBER 1:18-cv-02140-MHC

JUDGE Honorable Mark H. Cohen

PLAINTIFFPublic Employees’ Retirement System of Mississippi

DEFENDANTSAcuity Brands, Inc., Vernon J. Nagel, Richard K. Reece, & Mark A. Black

CLASS PERIODOctober 7, 2017 to April 3, 2017, inclusive


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This securities fraud class action arises from Acuity’s false and misleading statements regarding its ability to sustain the growth rate it experienced from 2010 to 2015.From 2010 to 2015, Acuity experienced a rapid growth rate fueled by the recovery in non-residential construction following the 2008 financial crisis and a wide transition to LED lighting. Acuity’s relationship with The Home Depot created a strong foundation for its extraordinary sales growth, as the Company experienced nine consecutive quarters of record growth. However, by the middle of 2015, competitive pressures in the lighting industry, including increased competition from overseas suppliers, lower LED prices, and a failure to break into the smart lighting solutions market, as well as a dramatic decline in sales to The Home Depot, slowed the Company’s growth considerably. Acuity’s investors were kept in the dark about all of these fundamental developments while the Defendants materially misrepresented Acuity’s ability to maintain the growth rate that it experienced in the previous five years.Acuity’s declining growth rate was revealed to the public gradually when the Company reported three consecutive quarters of below-expectation results. Acuity’s stock prices deteriorated, causing massive losses to shareholders.Plaintiff filed a Consolidated Amended Class Action Complaint on behalf of a putative class of investors, alleging that Acuity, Vernon Nagel, and Richard Reece violated Section 10(b) of the Exchange Act by making materially false and misleading statements regarding the growth rate of Acuity; and that Nagel, Reece, and Mark Black as controlling persons of Acuity violated Section 20(a) of the Exchange Act. On August 12, 2019, the United States District Court for the Northern District of Georgia granted in part and denied in part Defendants’ motion to dismiss.On August 25, 2020, Plaintiff’s motion for class certification was granted, certifying the following class: “All persons who invested in the publicly traded common stock of Acuity Brands, Inc. between October 7, 2015, through April 3, 2017 (the ‘Class Period’) and were damaged thereby.” The Court appointed Plaintiff, the Public Employees’ Retirement System of Mississippi, as Class Representative; and Kessler Topaz Meltzer & Check and Labaton Sucharow as Class Counsel. Defendants have taken an immediate appeal of the class certification order, which is currently pending before the United States Court of Appeals for the Eleventh Circuit.

Carnival Corp.

CASE CAPTION In re Carnival Corp. Securities Litigation

COURTUnited States District Court for the Southern District of Florida


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CASE NUMBER 1:20-cv-22202-KMM

JUDGE Honorable K. Michael Moore

PLAINTIFF

Massachusetts Laborers’ Pension and Annuity Funds, New England Carpenters Pension & Guaranteed Annuity Funds, & Michael W. Slaunwhite

DEFENDANTSCarnival Corp., Carnival plc, and Arnold W. Donald

CLASS PERIODSeptember 16, 2019 to March 31, 2020

This securities fraud class action concerns Defendants’ statements touting Carnival’s compliance with health and safety requirements and related protocols and with respect to the risk and impact of COVID-19 on its passengers, crew, and business. Carnival is the world’s largest cruise operator, carrying nearly half of the world’s cruise passengers on voyages around the world on over 100 ships across nine cruise lines. At the start of the Class Period, Defendants announced the creation of Carnival’s Incident Analysis Group (the “IAG”). The Company tasked the IAG with making recommendations to enhance Carnival’s Health, Environment, Safety, and Security (“HESS”) policies and procedures and developing programs to standardize training and investigation of the Company’s HESS issues.

The worldwide COVID-19 pandemic illustrated that Carnival’s HESS policies, Defendants’ statements touting their commitment to their passengers’ and crew members’ health safety, and the Company’s commitment to keeping its ships “free of . . . illness” were ultimately false. As COVID-19 spread throughout the world in the early months of 2020, unbeknownst to investors, Carnival’s policies, procedures, and infrastructure were insufficient, if existent at all. Rather than publicly acknowledging the risks posed by the coronavirus and that its policies, procedures, and protocols were insufficient to address them, Carnival publicly projected a “business as usual” narrative. Specifically, Carnival kept its ships full and on the water, continued to sell cruise tickets, and limited customers’ access to refunds. All the while, Carnival’s deficient health and safety protocols created all manner of problems on its ships, which ultimately proved to be virulent breeding grounds for the virus, causing severe illness and death among its passengers.

Despite Defendants’ falsely optimistic outlook on Carnival’s ability to contain the coronavirus and the potential effects of the virus on their business, the relevant truth began to emerge in mid-March.


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First, on March 16, 2020, Defendants disclosed publicly what they had known since late January: that COVID-19 would have a “material negative impact on [Carnival’s] financial results and liquidity,” and while the Company would be “unable to provide an earnings forecast,” it “expect[ed] results of operations for the fiscal year ending November 30, 2020 to result in a net loss.” The price of both Carnival common stock and Carnival ADSs declined by over 12% on this news. Then, on March 31, 2020, Defendants comprehensively revised the risk factors contained in the Company’s Form 10-K. These new risk factors finally divulged the true and extremely serious risks that the coronavirus pandemic posed to Carnival’s business as a result of Defendants’ inability to implement adequate policies, procedures, and protocols to safeguard passengers’ and employees’ health and safety. On this news, shares of Carnival common stock declined by 34%, and the price of Carnival ADSs declined by a similar amount.

Plaintiffs’ filed the Second Amended Class Action Complaint on July 2, 2021. Defendants’ motion to dismiss is fully briefed and pending before the Court.

General Electric Company

CASE CAPTIONSjunde AP-Fonden, et al., v. General Electric Company, et al.

COURTUnited States District Court for the Southern District of New York

CASE NUMBER 1:17-cv-08457-JMF

JUDGE Honorable Jesse M. Furman

PLAINTIFF Sjunde AP-Fonden and The Cleveland Bakers and Teamsters Pension Fund

DEFENDANTSGeneral Electric Company and Jeffrey S. Bornstein

CLASS PERIODMarch 2, 2015 through January 23, 2018, inclusive

This securities fraud class action case arises out of alleged misrepresentations made by General Electric (“GE”) and its former Chief Financial Officer, Jeffrey S. Bornstein (together, “Defendants”), regarding the use of factoring to conceal cash flow problems that existed within GE Power between March 2, 2015, and January 24, 2018 (the “Class Period”).


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GE Power is the largest business in GE’s Industrials operating segment. The segment constructs and sells power plants, generators, and turbines, and also services such assets through long term service agreements (“LTSAs”). In the years leading up to the Class Period, as global demand for traditional power waned, so too did GE’s sales of gas turbines and its customer’s utilization of existing GE-serviced equipment. These declines drove down GE Power’s earnings under its LTSAs associated with that equipment. This was because GE could only collect cash from customers when certain utilization levels were achieved or upon some occurrence within the LTSA, such as significant service work.

Plaintiffs allege that in an attempt to make up for these lost earnings, GE modified existing LTSAs to increase its profit margin and then utilized an accounting technique known as a “cumulative catch-up adjustment” to book immediate profits based on that higher margin. In most instances, GE recorded those cumulative catch-up earnings on its income statement long before it could actually invoice customers and collect cash under those agreements. This contributed to a growing gap between GE’s recorded non-cash revenues (or “Contract Assets”) and its industrial cash flows from operating activities (“Industrial CFOA”).

In order to conceal this increasing disparity, Plaintiffs allege that GE increased its reliance on receivables factoring (i.e., selling future receivables, including on LTSAs, to GE Capital or third parties for immediate cash). Through factoring, GE pulled forward future cash flows and, in light of the steep concessions it often agreed to in order to factor a receivable, traded away future revenues for immediate cash. In stark contrast to the true state of affairs within GE Power—and in violation of Item 303 of Regulation S-K—GE’s Class Period financial statements did not disclose material facts regarding GE’s factoring practices, the true extent of the cash flow problems that GE was attempting to conceal through receivables factoring, or the risks associated with GE’s reliance on factoring. Rather, Defendants affirmatively misled investors about the purpose of the Company’s factoring practices, claiming that such practices were aimed at managing credit risk, not liquidity

Eventually, however, GE could no longer rely on this unsustainable practice to conceal its weak Industrial cash flows. As the truth was gradually revealed to investors—in the form of, among other things, disclosures of poor Industrial cash flows, massive reductions in Industrial CFOA guidance, and a dividend cut that was attributable in part to weaker-than-expected Industrial cash flows—GE’s stock price plummeted, causing substantial harm to Plaintiffs and the Class.

In January 2021, the Court sustained Plaintiffs’ claims based on


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allegations that GE failed to disclose material facts relating its practice of and reliance on factoring, in violation of Item 303, and affirmatively misled investors about the purpose of GE’s factoring practices. Fact discovery in the case is ongoing and is currently scheduled to conclude in February 2022.

Goldman Sachs Group, Inc.

CASE CAPTION Sjunde AP-Fonden v. The Goldman Sachs Group, Inc. et al.

COURT United States District Court for the Southern District of New York

CASE NUMBER 1:18-cv-12084-VSB

JUDGEHonorable Vernon S. Broderick

PLAINTIFF Sjunde AP-Fonden (“AP7”)

DEFENDANTS

The Goldman Sachs Group (“Goldman Sachs” or the “Company”), Lloyd C. Blankfein, Gary D. Cohn, and Harvey M. Schwartz

CLASS PERIODFebruary 28, 2014 to December 20, 2018, inclusive

This securities fraud class action case arises out of Goldman Sachs’ role in the 1Malaysia Development Berhad (“1MDB”) money laundering scandal, one of the largest financial frauds in recent memory.In 2012 and 2013, Goldman served as the underwriter for 1MDB, the Malaysia state investment fund masterminded by financier Jho Low, in connection with three state-guaranteed bond offerings that raised over $6.5 billion. Goldman netted $600 million in fees for the three bond offerings—over 100 times the customary fee for comparable deals.In concert with Goldman, Low and other conspirators including government officials from Malaysia, Saudi Arabia, and the United Arab Emirates ran an expansive bribery ring, siphoning $4.5 billion from the bond deals that Goldman peddled as investments for Malaysian state energy projects. In actuality, the deals were shell transactions used to facilitate the historic money laundering scheme. Nearly $700 million of the diverted funds ended up in the private bank account of Najib Razak, Malaysia’s now-disgraced


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prime minister who was convicted for abuse of power in 2020. Other funds were funneled to Low and his associates and were used to buy luxury real estate in New York and Paris, super yachts, and even help finance the 2013 film “The Wolf of Wall Street.”AP7 filed a 200-page complaint in October 2019 on behalf of a putative class of investors alleging that Goldman and its former executives, including former CEO Lloyd Blankfein and former President Gary Cohn, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements about Goldman’s role in the 1MDB fraud. As alleged, when media reports began to surface about the collapse of 1MDB, Goldman denied any involvement in the criminal scheme. Simultaneously, Goldman misrepresented its risk controls and continued to falsely tout the robustness of its compliance measures. Following a series of revelations about investigations into allegations of money laundering and corruption at 1MDB, Goldman’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.In October 2020, the U.S. Department of Justice announced that Goldman’s Malaysia subsidiary had pled guilty to violating the Foreign Corrupt Practices Act (“FCPA”) which criminalizes the payment of bribes to foreign officials, and that Goldman had agreed to pay $2.9 billion pursuant to a deferred prosecution agreement. This amount includes the largest ever penalty under the FCPA.

On June 28, 2021, The Honorable Vernon S. Broderick of the U.S. District Court for the Southern District of New York sustained Plaintiffs’ complaint in a 44-page published opinion. The case is now in discovery.

Perrigo Co. plc

CASE CAPTION

Carmignac Gestion, S.A. v. Perrigo Co. plc, et al.; First Manhattan Co. v. Perrigo Co. plc, et al.; Nationwide Mutual Funds, on behalf of its series Nationwide Geneva Mid Cap Growth and Nationwide S&P 500 Index Fund, et al. v. Perrigo Co. plc, et al.; Aberdeen Canada Funds – Global Equity Fund, a series of Aberdeen Canada Funds, et al. v. Perrigo Co. plc, et al.; Schwab Capital Trust on behalf of its series Schwab S&P 500 Index Fund, Schwab Total Stock Market Index Fund, Schwab Fundamental U.S. Large Company Index Fund, and


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Schwab Health Care Fund, et al. v. Perrigo Co. plc, et al.; Principal Funds, Inc., et al. v. Perrigo Co. plc, et al.; and Kuwait Investment Authority, et al. v. Perrigo Co. plc, et al.

COURT United States District Court for the District of New Jersey

CASE NUMBER

No. 2:17-cv-10467-MCA-LDW; No. 2:18-cv-02291-MCA-LDW; No. 2:18-cv-15382-MCA-LDW; No. 2:19-cv-06560-MCA-LDW; No. 2:19-cv-03973-MCA-LDW; No. 2:20-cv-02410-MCA-LDW; No. 2:20-cv-03431-MCA-LDW

JUDGEHonorable Madeline Cox Arleo and Honorable Leda Dunn Wettre

PLAINTIFF

Carmignac Gestion, S.A., First Manhattan Co., Schwab Capital Trust, et al., Principal Funds, Inc., Kuwait Investment Authority, et al., Nationwide Mutual Funds, et al., and Aberdeen Canada Funds – Global Equity Fund, et al.

DEFENDANTSPerrigo Company plc (“Perrigo”), Joseph C. Papa, and Judy L. Brown

CLASS PERIODApril 21, 2015 through May 3, 2017, inclusive

This securities fraud class action stems from Perrigo’s efforts to mislead investors to stave off a hostile takeover bid by pharmaceutical rival Mylan NV in 2015. The Plaintiffs allege that Perrigo failed to disclose problems concerning the company’s $4.5 billion acquisition of Omega Pharma NV, an over-the-counter healthcare company based in Belgium, misrepresented its ability to withstand pricing pressure from the influx of competing drugs in the generic drug markets, and misrepresented.In early 2018, Kessler Topaz Meltzer & Check filed the first of seven opt-out securities fraud actions in the United States District Court for the District of New Jersey on behalf of U.S., European, and


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Middle Eastern institutional investors against Perrigo and its former chief executive and chief financial officers. The Honorable Madeline Cox Arleo denied Defendants’ motions to dismiss the actions in 2019. The parties completed fact discovery in June 2021, and are currently engaged in expert discovery.

Walgreen Co.

CASE CAPTION Washtenaw County Employees' Retirement System v Walgreen Co., et al.

COURT United States District Court for the Northern District of Illinois

CASE NUMBER 1:15-cv-03187

JUDGE Honorable Sharon Johnson Coleman

PLAINTIFFIndustriens Pensionsforsikring A/S (“Industriens”)

DEFENDANTS Walgreen Co. (“Walgreen” or the “Company”), Gregory D. Wasson, and Wade Miquelon

CLASS PERIODMarch 25, 2014 through August 5, 2014, inclusive

This securities fraud class action case arises out of Defendants’ representations and omissions regarding Walgreen’s highly publicized earnings target of $9 billion to $9.5 billion for fiscal year 2016 (the “FY16 target”) and the negative impact of hyperinflation in generic drug prices (“generic inflation”) combined with unfavorable reimbursement contracts that caused significant reductions in Walgreen’s gross margins and earnings. During the Class Period, Defendants repeatedly reaffirmed the FY16 target and represented that Walgreen was seeing “nothing unusual” with respect to generic inflation or reimbursement pressure. Plaintiff alleges that unbeknownst to investors, the systemic shift to generic inflation caused a catastrophic impact on Walgreen’s earnings and profitability because it was “locked up” in multi-year contracts with lower reimbursement rates that did not protect against generic inflation.Industriens filed a 124-page complaint in August 2015 on behalf of a proposed class of investors alleging that Walgreen and its former executives, CEO Greg Wasson and CFO Wade Miquelon, violated Section 10(b) of the Securities Exchange Act by making false and misleading statements and concealing material facts about the magnitude and severity of generic inflation and reimbursement pressure and the combined impact on Walgreens’ margins and


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profitability, including the FY16 target. As alleged, following Walgreens’ disclosure of a $2 billion shortfall to its FY16 EBIT target as a direct result of generic inflation and reimbursement pressure, Walgreens’s stock price fell precipitously, causing significant losses and damages to the Company’s investors.In September 2016, the Honorable Sharon Johnson Coleman issued an order denying in part Defendants’ motion to dismiss. In March 2018, Judge Coleman certified the case as a class action. Following Industriens’s amendment of the complaint in December 2018, Judge Coleman issued an order in September 2019 denying in part Defendants’ renewed motion to dismiss. The order held that Plaintiff’s amended complaint adequately alleged several additional false and misleading statements and omissions, including statements regarding the FY16 target and the negative impact of generic inflation and reimbursement pressure on the Company’s performance.The parties’ respective summary judgment motions are fully briefed and pending before Judge Coleman.

evan r. hoey

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