Lawsuits allege Navistar execs violated SEC, state laws

By CCJ Staff on
Navistar’s proprietary MaxxForce 15 was discontinued in September, when the company announced it would be using the Cummins ISX15 as its 15-liter option for International trucks.

Navistar’s proprietary MaxxForce 15 was discontinued in September, when the company announced it would be using the Cummins ISX15 as its 15-liter option for International trucks.

The recent lawsuits brought against truck and engine manufacturer Navistar International Corp. allege that former Navistar CEO Dan Ustian and current CFO Andrew Cederoth violated provisions of the Securities Exchange Act of 1934, along with a few state laws, says a report on CCJ sister site Successful Dealer, who spoke with attorney Willie Briscoe — one of the attorneys bringing claims against the company.

As reported Monday, the multiple class action suits brought against Navistar are on behalf of shareholders who bought Navistar common stock between Nov. 3, 2010, and Aug. 1, 2012.

One case in particular is being filed on behalf of Construction Workers Pension Trust Fund Lake-County and Vicinity — and others like them — who bought 6,709 shares of Navistar stock in the time period for $246,000 and sold them for $165,000 when the company’s stock tanked in the wake of discontinuing its MaxxForce 15 engine and dropping EGR-based emissions tech in favor of SCR engines equipped with Cummins aftertreatment systems.

According to the lawsuits, Ustian and Cederoth both sold their personal shares of the company’s stock when it was at record highs. Ustian sold 55,000 shares for nearly $3.9 million, and Cederoth sold 9,500 shares for $642,962.

As Monday’s report notes, the lawsuits allege Navistar artificially inflated its stock price by withholding information from shareholders — such as that its engines were not meeting EPA standards — and misleading shareholders as to where the company was headed financially.

Navistar declined comment Monday on the lawsuits.

For more on the story, see Successful Dealer‘s report.

3 comments
Trucker123
Trucker123

Business*  (didn't proof read i guess).

Trucker123
Trucker123

I hope Navistar tanks and burns.  The garbage trucks they have been selling for the past 5 - 6 years has cost companies and drivers millions in down time, headaches and lost customers if not the busniness them selves possibly having to close.  Don't get me wrong when you could get reliable detroits, cummins and cat engines they were good, but from about 08/09 on they have been garabge that Navistar themselves won't even take responsibility for. 

john3347
john3347

Several years ago International trucks were the best on the road and spent lots of good time on the road.  Since they have become International Truck and Engine Company they have been speeding downhill and increasing speed steadily.  I think it might be a good time to fire some department managers, possibly send some of them to jail, and hire some managers that know and appreciate trucks.



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