Investor Allegations Mount Against Norwegian Cruise Lines

By Emilie Ruscoe
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Florida newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!

Law360 (April 1, 2020, 3:02 PM EDT) -- Norwegian Cruise Line Holdings Ltd. faces a second proposed securities fraud class action in Florida federal court alleging that its shareholders were hurt by the company's response to the coronavirus pandemic.

Individual investor Abraham Atachbarian filed suit against Norwegian on Tuesday, accusing the company and two of its executives of attempting to staunch the company's losses by downplaying the seriousness of the novel coronavirus in its public filings and in its pitches to prospective customers.

"Instead of making truthful disclosures, certain of the company's managers took steps to falsely induce potential customers to book trips by underplaying the danger of COVID-19 and the extent to which it had spread and would [affect] Norwegian's business in order to enable Norwegian to falsely maintain its bookings and revenues, and enable Norwegian to announce that its financial health was far less impacted by the virus than was true," Atachbarian asserted in his private civil action.

Atachbarian is not the first investor to accuse Norwegian of inflating its stock price through allegedly false or misleading statements made by the company and its employees about the coronavirus outbreak.

Plaintiff Eric Douglas filed a suit against the company March 12, pointing to its recent securities filings and press releases, which he said presented a misleading positive outlook, and news reports that featured leaked internal communications and anonymously quoted Norwegian employees who said managers had pressured sales agents to mislead potential customers and provided scripted answers containing false reassurances about the growing pandemic.

But Atachbarian's suit adds to Douglas' claims allegations regarding a March 13 letter sent to Norwegian's CEO by Senators Richard Blumenthal of Connecticut and Edward J. Markey of Massachusetts demanding that the company cease spreading false information and "suspend all operations until sufficient measures are in place to protect the health and safety of [its] passengers and crewmembers."

The company suspended all of its cruises through Apr. 11 in response to the senators' letter — and Atachbarian claims that the price of Norwegian's shares subsequently fell $2.23, from an opening price of $13.33 to a close of $11.10.

Atachbarian also cited a March 23 announcement by Florida Attorney General Ashley Moody that her office had launched an investigation into reports that Norwegian Cruise Line fed sales staff "inaccurate one-liners" that downplayed the danger posed by the coronavirus outbreak to use as responses to questions from concerned customers.

"We are in the thick of a public health crisis like our modern world has never experienced," Moody said in a statement last week. "My consumer protection division is conducting an extensive investigation to get to the bottom of the disturbing allegations against Norwegian Cruise Lines."

Atachbarian seeks certification of a class including anyone who acquired Norwegian stock publicly traded on the New York Stock Exchange from Feb. 20, when it was announced that CEO and President Frank Del Rio sold 4,000 shares of Norwegian common stock for proceeds of $207,000 at $51.80 per share through March 11, when a media report about the alleged sales strategy was published, which Atachbarian says pushed down the company's trading price from $15.03 to $9.65.

The cruise line, whose corporate headquarters are in Miami, is incorporated in Bermuda.

Alongside Norwegian President and CEO Del Rio, the complaint names Executive Vice President and Chief Financial Officer Mark A. Kempa as the second individual defendant.

On Wednesday morning, Norwegian was trading just below $10, down significantly from the $15.03 trading price at the markets' close on March 11, the final day of the actions' proposed class period.

Attorneys for Atachbarian and representatives for Norwegian Cruise Lines did not immediately respond to requests for comment Wednesday, and contact information for Norwegian's attorneys and its executives could not be immediately determined.

Atachbarian is represented by Lynda J. Grant of the Grant Law Firm PLLC, Howard T. Longman of Stull Stull & Brody and Joshua H. Eggnatz of Eggnatz Pascucci PA.

Counsel information for Norwegian Cruise Lines, Del Rio and Kempa was not immediately available Wednesday.

The case is Abraham Atachbarian v. Norwegian Cruise Lines et al., case number 1:20-cv-21386, in the U.S. District Court for the Southern District of Florida.

--Additional reporting by Nathan Hale. Editing by Gemma Horowitz.

For a reprint of this article, please contact

Attached Documents

Useful Tools & Links

Related Sections

Case Information

Case Title

Abraham Atachbarian v. Norwegian Cruise Lines et al

Case Number



Florida Southern

Nature of Suit

Other Statutory Actions


Robert N. Scola, Jr

Date Filed

March 31, 2020

Law Firms


Government Agencies

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!