Investors are hitting FedEx with a class-action suit accusing the package giant of intentionally misleading them (FDX)

Reuters

• A Boston-based law firm is suing FedEx on behalf of some of its shareholders.
• Investors who bought 500 shares of FedEx or greater between September 19, 2017 and December 18, 2018 are qualified to join the suit.  
• The suit accuses FedEx of misleading its investors by playing down the impact of a 2017 cyberattack and the cost of integrating TNT Express, a Dutch delivery service FedEx acquired in 2016.
• "FedEx intends to vigorously defend itself against these allegations and will respond accordingly," a statement from FedEx reads.
• Visit Business Insider’s homepage for more stories.

FedEx has had a challenging year — from several, sudden C-suite departures to a probe and potential blacklisting from the Chinese government that sank its stock to a three-year low.

But the one that’s been vexing investors the most may be the 2016 acquisition of Dutch package company TNT Express. The $4.4 billion purchase has been hamstringed by the NotPetya cyberattack that cost the company some $400 million and a softening market in Europe.

And the costs of integrating the company into FedEx are about double what the company had initially estimated. Bloomberg opinion writer Brooke Sutherland summarized the acquisition as "a dud." 

Read more: FedEx no longer will fly your Amazon packages — and now pressure is mounting on the company as it gears up its in-house air-freight network

That’s given rise to a class-action lawsuit that accuses FedEx of misleading its shareholders on the impacts of the NotPetya cyberattack and the length and cost of the TNT integration.

The lawsuit, which comes from the Boston-based Thornton Law Firm, claims FedEx did not properly inform investors on costs around the cyberattack and the integration, violating federal securities laws. The law firm did not respond to a Business Insider request for comment.

Investors who bought 500 shares of FedEx or greater between September 19, 2017 and December 18, 2018 are qualified to join the suit. "The lawsuit seeks to recover this loss for shareholders who purchased during the Class Period," the law firm said in a statement released on July 2.

"The lawsuit alleges that after the crippling cyber-attack known as NotPetya, FedEx falsely assured investors that its negative impact on newly acquired business, TNT, was minimal and recovery was on track," the statement said.

FedEx said in a statement sent to Business Insider:

FedEx and certain of its current and former executives have been named as defendants in two putative class action lawsuits purported to be brought on behalf of persons or entities who acquired FedEx common stock during the period from 19 September 2017 through 18 December 2018. The lawsuits allege violations of the U.S. securities laws in connection with the Company’s public disclosures during that period. FedEx intends to vigorously defend itself against these allegations and will respond accordingly.

The suit is presently seeking a lead plaintiff and has not yet been certified as class action. 

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See Also:

• Amazon is moving away from USPS and UPS for its in-house delivery network — but the ‘sloppier’ system may be delaying your packages
• Boeing just announced $100 million for families of 737 Max crash victims. It likely won’t be enough.
• Tesla’s record quarter calms fears about Model 3 demand, but there’s a big question about whether the company hurt profits to boost sales

SEE ALSO: Truckers say Amazon’s new logistics empire is being underpinned by low, ‘ridiculous’ rates — and some are refusing to work with them

Source: Business Insider – rpremack@businessinsider.com (Rachel Premack)