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Acuity Brands, Inc.

CASE CAPTION In re Acuity Brands, Inc. Securities Litigation
COURT United States District Court for the Northern District of Georgia
CASE NUMBER 1:18-cv-02140-MHC
JUDGE Honorable Mark H. Cohen
PLAINTIFF Public Employees’ Retirement System of Mississippi
DEFENDANTS Acuity Brands, Inc., Vernon J. Nagel, Richard K. Reece, & Mark A. Black
CLASS PERIOD October 7, 2017 to April 3, 2017, inclusive

This securities fraud class action arises from Acuity’s false and misleading statements regarding its ability to sustain the growth rate it experienced from 2010 to 2015.

From 2010 to 2015, Acuity experienced a rapid growth rate fueled by the recovery in non-residential construction following the 2008 financial crisis and a wide transition to LED lighting. Acuity’s relationship with The Home Depot created a strong foundation for its extraordinary sales growth, as the Company experienced nine consecutive quarters of record growth. However, by the middle of 2015, competitive pressures in the lighting industry, including increased competition from overseas suppliers, lower LED prices, and a failure to break into the smart lighting solutions market, as well as a dramatic decline in sales to The Home Depot, slowed the Company’s growth considerably. Acuity’s investors were kept in the dark about all of these fundamental developments while the Defendants materially misrepresented Acuity’s ability to maintain the growth rate that it experienced in the previous five years.

Acuity’s declining growth rate was revealed to the public gradually when the Company reported three consecutive quarters of below-expectation results. Acuity’s stock prices deteriorated, causing massive losses to shareholders.

Plaintiff filed a Consolidated Amended Class Action Complaint on behalf of a putative class of investors, alleging that Acuity, Vernon Nagel, and Richard Reece violated Section 10(b) of the Exchange Act by making materially false and misleading statements regarding the growth rate of Acuity; and that Nagel, Reece, and Mark Black as controlling persons of Acuity violated Section 20(a) of the Exchange Act. On August 12, 2019, the United States District Court for the Northern District of Georgia granted in part and denied in part Defendants’ motion to dismiss.

On August 25, 2020, Plaintiff’s motion for class certification was granted, certifying the following class: “All persons who invested in the publicly traded common stock of Acuity Brands, Inc. between October 7, 2015, through April 3, 2017 (the ‘Class Period’) and were damaged thereby.” The Court appointed Plaintiff, the Public Employees’ Retirement System of Mississippi, as Class Representative; and Kessler Topaz Meltzer & Check and Labaton Sucharow as Class Counsel.  Defendants have taken an immediate appeal of the class certification order, which is currently pending before the United States Court of Appeals for the Eleventh Circuit.