Filed on Friday in Illinois by Barbara Chandler, the new multimillion-dollar lawsuit alleges that the retailer knowingly provided inaccurate information about its policies connected to the resale of “unsanitary” beauty products that had already been opened.
As a result, Chandlers case claims, Ulta “induce[d] reasonable investors to misjudge the value of the companys [stock].” When news reports came out with reports of Ultas alleged shady re-selling practice, Ultas stock fell significantly in value.
This is not Ultas year. The beauty retailer is still reeling from a class-action lawsuit filed in February by shoppers who were outraged by allegations that Ulta had been selling used makeup as if it were brand new. According to “The Fashion Law,” the company is now being sued again, this time by a stockholder who claims that the company intentionally shared false information about its practices and policies in ways that cost shareholders money.
In short: Ulta was supposedly doing customers dirty by re-selling used makeup on the sly, and it was also supposedly doing stockholders dirty by not being straightforward about practices that could make the companys products less desirable and therefore less valuable.
“Because of [the defendants] positions with the company, and their access to material information available to them but not to the public, they knew that the adverse facts [regarding the companys return policy] had not been disclosed to and were being concealed from the public, and that the positive representations being made were then materially false and misleading,” the filing reads, according to “The Fashion Law.” The lawsuit is being filed with class action status that allows other stock holders to join the suit for a share of the damages.
Watch this space for updates as the suit progresses.
UPDATE, Monday, March 5, 2:23 p.m.: A representative from Ulta provided Fashionista with the following statement:
“We are aware of the lawsuit but to date we have not been served. We deny the lawsuits allegations and intend to defend against this matter vigorously. As with pending legal matters, we are unable to offer additional comment.”