Royal Caribbean sued over accounting error

Royal Caribbean sued over accounting error

Law firm Kahn Swick & Foti has confirmed it will launch a class action law suit against Royal Caribbean after the cruise operator admitted an accounting error during its Second Quarter 2011 fiscal results.

Stock prices in the company dropped by as much as 13 per cent following the admission, leaving many investors out of pocket.

Kahn Swick & Foti accuses Royal Caribbean of making “materially false and misleading statements related to the Company’s business and operations” in violation of the Securities Exchange Act of 1934.

The firm launched the suit on behalf of purchasers of the securities of Royal Caribbean between January 27th, 2011 and July 28th, 2011 in a Miami earlier. 

Other law firms are investing the matter, such as Faruqi & Faruqi and Pomerantz Haudek Grossman & Gross.

Royal Caribbean Chairman Richard Fain has earlier said he was “embarrassed” by the error, which was made in 2009 and discovered by the company’s internal accounting team.

Royal Caribbean asserts it has revised its past financial statements, it did not restate its prior earnings, and claimed the statements are now valid.