U.S. Steel Hammered with Securities Lawsuit

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United States Steel Corporation and two individual officers are the defendants in a proposed class action lawsuit that claims they misled investors and published false information to artificially inflate the price of the company’s stock. Despite favorable market conditions, the company reported a net loss of $440 million in 2016, according to the complaint. The company’s chief officers were allegedly hopeful and represented to the investing public that their new business strategies were “improving earnings power.” They reported, however, their first quarter financial results on April 25, 2017, “revealing worsening financial results despite improved market conditions,” the suit claims. The news supposedly resulted in a stock price drop of 26.8% in one day, which was “the largest one-day decline in the price of U.S. Steel stock since at least 1991,” according to the complaint. The suit argues that the company’s chief officers failed to disclose “adverse facts” about the company’s financial state and artificially inflated the company’s stock price by promising financial success in 2017. The “materially false and misleading statements” published by the defendants consequently caused stockholders to suffer economic harm, the lawsuit says.