Navistar International Corp., its former CEO and the company’s CFO are being accused of misleading shareholders about a diesel engine technology that failed to meet 2010 federal emission standards, according to a Chicago Tribune report.
A lawsuit filed in federal court in Chicago alleges that former CEO Dan Ustian and CFO Andrew Cederoth continued to say that the company’s big bore diesel engines would meet federal emissions standards when they never did. As a result of his statements, the lawsuit alleges, Navistar common stock traded at “artificially inflated prices,” reaching a high of $70.17 in April 2011.
“When defendants revealed Navistar’s true financial condition and future business prospects, the price of Navistar common stock fell over 69% from its Class Period high,” according to the lawsuit.
The lawsuit was filed in March on behalf of Construction Workers Pension Trust Fund and “others similar situated” that purchased shares between November 3, 2010 and August 1, 2012. The pension trust fund purchased 6,709 shares of Navistar stock for a total of roughly $246,000 and sold them for about $165,000.
During that same period, the lawsuit alleges, Ustian sold 55,469 shares for nearly $3.9 million and Cederoth sold 9,548 shares for $642,962.
A company spokesman said Navistar does not comment on pending litigation.