Lawsuits & Judgments

On August 27th, the New York law firm of Abbey Spanier Rodd & Abrams, LLP has filed a class action securities lawsuit against Tween Brands in the US District Court of Southern Ohio.

The lawsuit claims that the company, specifically CEO Michael Rayden, made misleading statements about the company’s financial outlook for the second quarter of 2007, artificially inflating the share price. The shareholders are alleged, of course, to have suffer greatly as a result.

Things don’t look particularly good for Tween Brands in this case as there seems to be some strong circumstantial evidence. The announcement issued by Abbey Spanier Rodd & Abrams, LLP, outlines some of the claims that were made in the complaint. .

1. In May 2007 CEO Rayden announced a favorable earnings estimate for the second quarter. Rayden predicted earnings per share to be in the $.13 to $.16 range and labeled this estimate “conservative”.
2. The CEO also publicly announced that Tween Brands would resume a $150 million stock buy back program on May 29th.

Per the announcement (on PR Newswire) “The Complaint alleges that even though Rayden knew that consumer demand had fallen materially, that rents and marketing costs were ballooning, and that schools had pushed the beginning of the school year later into the summer, he knowingly or recklessly ignored these factors.”

It wasn’t until August 22 , when the company revealed that they had experienced a weak second quarter and Tween Brands subsequently revised, downward, its 2007 forecast. The market reacted strongly to the unexpected news and the Tween Brands share price plunged $11 dropping from $38.59 to $27.59.

What seems to make matters worse is that CEO Rayden sold 150,000 shares of company stock between June 8^th and 11^th when the shares were trading at more than $41 per share. These transactions netted the executive more than $3 million.

If you purchased Tween Brand (TWB) securities during the period from June 8, 2007 and August 21, 2007 you may be eligible to be a member of “the class” in this class action lawsuit. If you think you might be eligible you need to contact Abbey Spanier Rodd & Abrams, LLP before October 23rd, 2007.

Abbey Spanier Rodd & Abrams, LLP

212 East 39th Street
New York, New York 10016
(212) 889-3700
(800) 889-3701 (Toll Free)