Shareholder 101: A Failure to Disclose Can Become Subject to a Lawsuit

The primary laws that govern the disclosures to shareholders and the marketplace include the Securities Act of 1933 and the Securities Exchange Act of 1934 and the rules adopted by the Securities and Exchange Commission (the “SEC”).  These laws have come subject to scrutiny in the Camping World Holdings, Inc. who suffered financial losses in excess of $100,000 due to a failure to disclose.  Some of their executives have been charged with failing to disclose material information during the Class Period, violating federal securities laws.

Generally speaking, causes of action have been interpreted by the federal courts to specifically set forth in the statutes and to address claims brought as class actions.  These types of claims are often brought forward and against the corporation, its directors and officers, purchasers and sellers of securities, persons otherwise having a duty to investors who participate in the alleged disclosure violation.  Sometimes accountants and underwriters and persons required to make public filings with the SEC.  The history behind it is entrenched in common law notions of disclosure claims such as fraud and negligent misrepresentation.

In this case, the class action complaint submitted on behalf of the shareholders alleges that defendants made materially false and misleading statements and failed to disclose:

  1. control and controls over financial reporting;
  2. historical financial results had been materially misstated;
  3. certain stores had encountered setbacks with integration, affecting profit margins in a negative way;
  4. part of their business growth was declining as the market was being lost to competitors. Trends not being followed or watched in the industry was also cited as a possible reason for that decline. For such reasons, the stock had been purchased at a higher inflated price and was detrimental for those who endured investment loss as a result.

According to the suit’s claims, the stock price continued to decline due to poor quarterly results on the financial and operational fronts.  The problems continued and losses increased.  All of this had been happening, allegedly unchecked.

An overview of the Camping World Holdings, Inc. as shown on is as follows:

It offers products under the brands Camping World and Good Sam. The company operates through the following segments: Consumer Services & Plans and Retail.

The Consumer Services & Plans segment offers services such as emergency roadside assistance, property and casualty insurance programs, travel assist programs, extended vehicle service contracts, co-branded credit cards, vehicle financing and refinancing, club memberships, and publications and directories.

The Retail segment offers products such as new vehicles, used vehicles, parts, and service, including RV accessories, and supplies, as well as finance and insurance.

The company was founded in 1966 and is headquartered in Lincolnshire, IL.

Of course, jurisdiction is not limited simply to Illinois. Just recently, the former Attorney General of Louisiana, Charles C. Foti, Jr., reminded investors that they have until December 18, 2018, to file.  This action is pending in the United States District Court for the Northern District of Illinois. The time period applicable applies for Class A shares between March 8, 2017, and August 7, 2018, inclusive (the “Class Period”).
Super Lawyers named Lakeview and Elmhurst Illinois closely held corporation law trial attorney Peter Lubin a Super Lawyer and Illinois business dispute attorney Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Illinois breach of contract, partnership, shareholder rights, and business trial lawyers have over thirty years of experience in litigating complex business disputes, shareholder freeze-outs, and squeeze-outs, breach of fiduciary duty and partnership dispute claims and many different types of business and commercial litigation disputes.  Our Kane and DuPage Counties business dispute lawyers, civil litigation lawyers, and copyright attorneys handle emergency business lawsuits involving injunctions disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud. You can contact us by calling at 630-333-0333.  You can also contact us online here.

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