Judge Orders Signet to Face Fraud Lawsuit

RAPAPORT…  Signet Jewelers will have to answer allegations of security fraud after a US district-court judge rejected the company’s appeal against a pending lawsuit.

The owner of Kay Jewelers and Zales had asked the court to dismiss a claim by the Public Employees Retirement System of Mississippi (PERS) that it misled investors regarding allegations of sexual-discrimination against Signet executives during the late 1990s and 2000s and the health of its credit program.

Federal judge Colleen McMahon this week rejected Signet’s argument that it had fully complied with its disclosure obligations relating to the sexual-harassment allegations. The allegation by PERS that Signet had not adequately provided the required accurate description of the harassment claims was strong enough to be heard in court, the judge added.

McMahon also dismissed Signet’s argument that updates regarding its credit portfolio were “puffery or inactionable statements of opinion,” stressing those statements were an effort to reassure investors about the overall strength of the company.

“This ruling on a preliminary motion did not include any findings on the claims, which the company asserts are without merit,” David Bouffard, Signet’s vice president of corporate affairs, told Rapaport News. “We will vigorously defend against the claims.”

Image: Zales store, Massachusetts (Shutterstock)