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Avon Products, Inc. Long Term Investor Files Lawsuit Against Directors

  • If you purchased Avon Products, Inc. (NYSE: AVP) stock and currently hold those NYSE AVP stocks, you may have certain options. Please contact the Shareholders Foundation, Inc.

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Lawsuit Overview

Company
Avon Products, Inc.
Security
NYSE: AVP

Case Name
Avon Products Shareholder Derivative Action 07/29/2011
Type of Lawsuit
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Summary

San Diego, Jul 29, 2011 (Shareholders Foundation) -- A current investor in shares of Avon Products, Inc. (NYSE: AVP) filed a lawsuit against certain directors over alleged breaches of fiduciary duties.

According to the complaint the plaintiff derivatively alleges that certain directors breached their fiduciary duties owed to investors in Avon Products, Inc. (NYSE: AVP). The lawsuit against directors follows a lawsuit filed in United States District Court for the Southern District of New York on behalf of NYSE: AVP investor against Avon Products over alleged violations of Federal Securities Laws. According to that complaint the plaintiff alleges that Avon Products, Inc violated the Securities Exchange Act of 1934. Specifically, the plaintiff claims that defendants mislead investors as to the size and scope of potential violations of the Foreign Corrupt Practices Act (“FCPA”). 

In October 2008 the door-to-door cosmetics marketer Avon Products announced it notified the U.S. Securities and Exchange Commission (SEC) and Justice Department (DOJ) about its internal investigation of potentially improper payments to Chinese regulators. According to the complaint China had imposed a ban on door-to-door selling in the 1998, which initially forced Avon Products to market its products in stores, but in 2006 Avon received a “license by the Ministry of Commerce, People’s Republic of China […] to permit direct selling, i.e. door-to-door marketing”.

Then in September 2008 the deputy director of the Foreign Fund Division of the Chinese Ministry of Commerce was detained for allegedly accepting bribes, so the lawsuit. Avon Products said in its October 2008 announcement that it was looking into whether certain travel, entertainment and other expenses in China might have been improperly incurred. The Wall Street Journal reported that those possible wrongdoing under investigation include the alleged purchases of trips to France, New York, Canada and Hawaii for a Chinese government official with ties to Avon's business.

On April 12, 2010, Avon Products announced that four executives have been suspended in connection with an alleged bribery that began with the company's China operation as early as 2008.