Jessica Alba’s Honest Company sued by shareholders for alleged fraud

Jessica Alba’s Honest Company is under fire for allegedly misleading shareholders (Picture: MediaPunch/Shutterstock)

Jessica Alba’s Honest Company is being sued by shareholders for alleged fraud.

The Sin City star’s firm has been accused of misleading people by failing to disclose essential details about sales after they saw the business boom during the early months of the coronavirus pandemic.

It is claimed parents were stocking up on diapers and other products, causing sales to fall in the subsequent quarters.

According to documents obtained by TMZ, the shareholders insisted they bought Honest stock when the company went public in May 2021 because of strong financial reports from the previous year, making it seem as if the company was on the rise.

However, two months later, a report from the firm revealed they had lost $20 million in the second quarter of 2021, causing stock prices to plummet almost 43$ from the public offering price.

The shareholders alleged in the lawsuit that Honest hid the basic fact that consumers had stockpiled because of the pandemic and by the time they went public, they knew sales had dropped in a major way.

The Honest Company went public in May and raised $413m (£297m) in its IPO (Photo by Dimitrios Kambouris/Getty Images for The Honest Company )

However, the group admitted Honest had disclosed the global health crisis had contributed to high sales and there was no assurance the figures would continue at such a level, but they argued the firm knew sales had already begun to drop but weren’t transparent about it.

A spokesperson for Jessica and the Honest Company has not yet commented on the lawsuit.

The 40-year-old actress – who has children Honor, 13, Haven, nine, and Hayes, three, with husband Cash Warren – previously admitted she has been attending therapy with her teenage daughter in order to improve communication between them.

Got a story?

If you’ve got a celebrity story, video or pictures get in touch with the Metro.co.uk entertainment team by emailing us [email protected], calling 020 3615 2145 or by visiting our Submit Stuff page – we’d love to hear from you.

MORE : Jessica Alba praises Zac Efron’s smooth dance moves as they join forces for his ‘first TikTok ever’

MORE : Jessica Alba earns $2.6m in one day as brand The Honest Company goes public

Most Related Links :
newsbinding Governmental News Finance News

Source link

Back to top button