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id: 166, Created by Stan Vick, Scout
Cavco Industries Inc
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On September 2, 2021, the SEC filed a complaint against Cavco, former CEO Joseph Stegmayer, and former CFO and Chief Compliance Officer Daniel Urness. The SEC complaint alleged that Stegmayer and Urness caused Cavco to purchase shares of publicly traded companies on material non-public information.
On this news, shares of Cavco fell by 2.5% to close at $252.48 per share on September 3, 2021.
Going back, on February 4, 2019, the Company provided a corporate update regarding the SEC investigation, disclosing that the SEC had requested additional documents. The Company also announced spending and expecting to spend, millions of dollars on legal and insurance expenses in relation to the SEC’s subpoenas and the Company’s independent investigation into the matter.
Previously, On November 8, 2018, the Company reported to the SEC that for the period ending September 29, 2018, it believed its recently-departed CEO, Stegmayer, “traded in certain publicly traded stock in his personal accounts as well as in accounts held by the Company at a time when the Company had agreed to refrain from such trading.” Furthermore, the Company reported that the SEC had issued subpoenas to it, and also to Stegmayer, relating to the trading in the stock of another public company.
The case was related to the trading operations of the CEO in his private and Company accounts using material information about merger discussions with one of its competitors, Skyline, after signing an NDA. On September 19, 2017, Stegmayer and Urness (CFO) called Skyline’s investment bank and expressed interest in acquiring Skyline at $13.50 per share. Between September 20 and October 31, 2017, Cavco purchased 34,730 shares of Skyline at around $11 per share. Cavco’s 2017 purchases of Skyline shares were not reported to Cavco’s board of directors until October 2018, after the SEC served a subpoena on Cavco for information related to this trading. Thus, all relevant procedures, internal policies, and regulations were violated, and as a result, the interests of all stakeholders of the Company.
Failure to Disclose,
Breach of Fiduciary duty,
Shock Event Date
02 September 2021