American Apparel Class Claims Partly Greenlighted

Law360, New York (January 17, 2013, 5:12 PM EST) -- A California judge kept alive Wednesday proposed class action claims that American Apparel Inc. misrepresented its compliance with federal employment laws to investors, but dismissed securities fraud allegations against the retailer and its founder Dov Charney.

Judge Margaret M. Morrow ruled the shareholders sufficiently pled claims that the company knowingly employed undocumented workers before an investigation by the Department of Homeland Security’s Immigration and Customs Enforcement division. She also ruled American Apparel did not intentionally mislead investors regarding the negative effect that terminating illegal workers would...
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