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NEW YORK — Murray, Frank & Sailer LLP announced Feb. 18 that it has filed
a class action complaint in the U.S. District Court for the Southern District of
New York (No. 10 Civ. 1175) on behalf of all individuals and institutions who
purchased Toyota Motor Corp. publicly traded securities between Dec. 22, 2006,
and Feb. 2, 2010.
Toyota American Depositary Shares (ADSs), as well as Toyota common stock,
which trades on the Tokyo Stock Exchange, are included in this case. The
complaint seeks damages for violations of the Securities Exchange Act of
Members of the class have until April 9, 2010, to move the court to serve as
The complaint names Toyota Motor Corp., Toyota Motor North America Inc.,
Toyota Motor Sales U.S.A. Inc. and certain officers and directors of these
companies, as defendants. The complaint alleges that during the class period,
the defendants issued materially false and misleading statements regarding the
company’s operations, its business, and its outlook. Specifically, defendants
failed to disclose ongoing safety issues and quality control problems with
Toyota’s automobiles, especially the fact that accelerator pedals installed in
many of Toyota’s cars were defective and could become stuck in the depressed
position, leading to unintended acceleration, the plaintiffs allege. As a result
of defendants’ false statements, Toyota’s securities traded at artificially
inflated prices during the class period, they claim.
According to the lawsuit:
The safety and quality problems that Toyota was experiencing were partially
disclosed on Aug. 15, 2007, when the National Highway Transportation Safety
Association announced that it was stepping up an investigation into reports that
Toyota’s Lexus branded cars were susceptible to unintended acceleration. As a
result of this news, the price of Toyota ADSs dropped $4.80 to close at $113.19.
Toyota common stock also dropped approximately 9 percent. Another partial
revelation occurred on Oct. 16, 2007, when Toyota tumbled from number one to
number three in overall reliability in the annual Consumer Reports reliability
survey. The price of Toyota ADSs dropped another 5.5 percent to close at $106.40
in response to this news. Toyota common stock likewise dropped approximately 5
percent. Although these events partially disclosed that Toyota was having
problems with the quality and safety of its vehicles, they did not reveal the
full extent of these problems.
On Jan. 21, 2010, Toyota announced a massive recall of eight different
vehicle models relating to defective accelerator pedals. On Jan. 26, 2010,
Toyota announced that it was halting the sale of these models as a result of the
accelerator pedal defect, and also announced that the company was shutting down
its North American assembly lines for one week beginning Feb. 1, 2010. As a
result of this news, Toyota’s ADSs plunged $7.01 per share to close at $79.77
per share on Jan. 27, 2010, for a drop of more than 8 percent. Toyota common
stock also fell, dropping more than 4 percent. On Feb. 2, 2010, after the market
closed, Toyota reported that its U.S. sales for January 2010 had dropped by 16
percent from a year ago because of the recall and subsequent sales suspension of
its most popular models. As a result of this news, Toyota’s ADSs fell $4.69 per
share, closing at $73.49 per share on Feb. 3, 2010, for a decline of 6 percent.
Toyota’s common stock also dropped approximately 6 percent.