LOS ANGELES (Legal Newsline) - The law firm Scott+Scott is asking to lead shareholder litigation against a health apparel company.
The firm filed its motion to be appointed lead counsel Jan. 3 in a Los Angeles federal court case against Figs, Inc., after recently being granted the same status in a New York case against online order/delivery software company Olo.
Scott + Scott has asked in the Figs case that Don Paul Corbin and Mohamad Rizka as lead plaintiffs. Bernstein Litowitz is representing the City of Hallandale Beach Police Officers' and Firefighters' Personnel Trust but has not filed a similar motion.
The plaintiffs allege in their complaint that they acquired common stock in FIGS, a healthcare apparel and lifestyle seller, between May 27, 2021, and May 12, 2022. They allege that FIGS's initial public offering (IPO) announced in June of 2021 contained untrue statements and omitted material facts that were required by law.
Specifically, the plaintiffs claim FIGS stated its "direct-to-consumer" strategy was a success when the company's co-founders had "little to no experience" in running the company, were unable to secure repeat customers and failed to disclose that the company was making choices that were "at odds with its purported data-driven inventory approach."
They further claim FIGS's false statements came to light in December of 2021 when its CFO resigned and again in May 2022 when the company announced "disappointing financial results."
The plaintiffs allege the defendants' actions led to FIGS's stock declining by nearly 25%.
Scott+Scott says its clients lost about $300,000 in the stock drop and have the largest financial interest in the litigation.
"Scott+Scott has substantial experience in the prosecution of securities fraud class actions and possesses the necessary resources to efficiently conduct this litigation," its motion says.
"Specifically, Scott+Scott has served as lead or co-lead counsel in many high-profile class actions and has recovered hundreds of millions of dollars for victims of corporate fraud."