American Apparel Gets Investor Class Action Knocked Out

Law360, New York (January 13, 2012, 5:33 PM EST) -- American Apparel Inc. on Friday won its bid to dismiss a consolidated fraud class action in California federal court alleging the slumping clothing retailer duped investors about the legality of its immigrant workers and bookkeeping.

U.S. District Judge Margaret M. Morrow granted the company's May motion to toss the suit, giving the plaintiffs 45 days to file an amended complaint. She found that the statements on which the plaintiffs' claims relied did not satisfy the standards for pleading fraud.

The judge agreed with American Apparel's argument...
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