A Toronto law firm said yesterday it has launched a class-action lawsuit against Western Coal Corp., alleging the company and some of its executives, including CEO John Hogg, violated securities laws and misled investors for personal financial gain.
The plaintiffs claim that on Nov. 14 2007, the company stated it did not expect to meet its financial obligations, citing current coal prices and the Canadian-U.S. dollar exchange rate.
Shares plunged from a high of $1.75 to a low of 47 cents. Then on Nov. 22, Western Coal announced it would receive the financing it needed from Audley European Opportunities Fund.
The suit alleges that in between the announcements, company insiders purchased 111,000 shares of Western Coal.
None of the allegations have been proven in court.
The company issued a statement Monday saying it believes “the allegations are without merit and intends to vigorously defend them as well as the plaintiff’s attempt to obtain court approval to proceed with the action.”