Coke Accused of Deceiving Investors
Monday, October 30th 2000, 12:00 am
By: News On 6
ATLANTA (AP) â€” The Coca-Cola Co. has been accused in a federal lawsuit of artificially inflating its stock price and misleading investors. The company calls the allegations ``ridiculous.''
The Philadelphia-based Carpenters Health & Welfare Fund, which manages about $80 million in assets, filed the suit late Friday in Atlanta.
The lawsuit accuses the company and senior executives of forcing major bottlers to buy $300 million to $400 million in soda concentrate last year to help the Atlanta-based beverage giant meet third-quarter revenue and earnings forecasts. Those results caused the company's stock price to rise during the fourth quarter, according to the suit.
But the stock fell in January after the company said its 2000 results would fall short of projections because bottlers had too much concentrate inventory, the suit claims.
The lawsuit also says Coke failed to account properly for hundreds of millions of dollars related to troubled assets in Russia and Japan.
``These are baseless, false and even ridiculous allegations,'' Coke said Monday in a news release. ``Our securities practices are above board and we scrupulously adhere to all securities rules and regulations.''
The plaintiffs are seeking class-action status to represent everyone who purchased Coke shares between Oct. 21, 1999, and March 6, 2000.
The suit was filed by Milberg Weiss Bershad Hynes & Lerach, a San Diego law firm that has filed thousands of shareholder lawsuits and was the target of a 1995 federal law aimed at reducing such litigation.
Shares of Coca-Cola rose 68.8 cents to $59.69 in Monday afternoon trading on the New York Stock Exchange.
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