A money transfer company has been sued by stockholders over a sale of stock in March 2014, alleging the company made false and misleading statements to investors.
Iron Workers District Council of New England Pension Fund filed the lawsuit May 19 in Delaware Superior Court in and for New Castle County against MoneyGram International and its executives, alleging the company didn't tell investors that one of its agents, Walmart, was planning on launching its own money transfer product.
The lawsuit says MoneyGram issued 8 million shares of common stock and also announced cost-cutting measures in order to reach $2 billion in annual revenue by 2017. The plaintiffs contend the cost-cutting measures were due to Walmart's announcement, and would help MoneyGram lower its costs to compete with Walmart.
Walmart is an agent of MoneyGram and works closely with the company, the suit states, and is the only agent that consists of more than 10 percent of MoneyGram's total company fee and investment revenue. Back in 2011 the companies agreed to a new contract, which would allow Walmart to offer its own money transfer product, the suit says.
Iron Workers District Council seeks class status and an unspecified amount in damages. It is represented by attorneys Christine S. Azar and Ryan T. Keating of Labaton Sucharow in Wilmington, Delaware; and Christopher J. Keller and Michael W. Stocker of Labaton Sucharow in New York City.
Delaware Superior Court in and for New Castle County case number 1:15-cv-00402.