A stockholder of CBL & Associates is suing the Chattanooga-based mall owner in Chattanooga Federal Court, claiming its officials artificially inflated the value of the company's stock.
Tommy French, of Baton Rouge, La., brought the action against CBL, President Stephen Lebovitz and Vice President Farzana Mitchell.
He claims that CBL officials made false and misleading statements about the company's financial position. He said it led to investigations by the FBI and the Security and Exchange Commission.
In response, CBL officials said, “We have received and reviewed the plaintiff’s complaint, and it is clear that the plaintiff’s claims are based on little more than a media report that cites unnamed sources and meritless allegations, which we have already and continue to strongly deny. To reiterate our prior statement, neither the company nor any company executive has been contacted by any regulatory or law enforcement agency regarding our company’s accounting or financial practices. At all times, we operate with the utmost integrity and hold ourselves to the highest ethical standards. We have stringent policies and procedures in place to ensure all of our accounting and financial processes and reporting comply with applicable laws, rules and regulations.”
The suit said after the Wall Street Journal this week reported the alleged probes that the company stock fell by $0.86, nearly nine percent, to close at $9.40 on Wednesday, representing tens of millions of dollars in losses to investors.
The lawsuit says Senator Bob Corker is closely tied to the CBL & Associates management and has made large profits through numerous trades of the company stock.
It asks compensatory and punitive damages and seeks to be a class action case.
It was filed by attorneys Jeffrey Block, Stephen Harte and Bradley Vettraino of Boston.
A separate lawsuit was filed against CBL at the same time, but details of that case were not immediately available.