A federal judge has thrown out a class-action lawsuit filed by a pension fund alleging that H&R Block misled investors about its legal problems, according to published reports.
The complaint, brought by several individual shareholders and the Iron Workers Local 16 Pension Fund, alleged that Block had misrepresented the dangers presented by legal challenges to its Refund Anticipation Loan and Express IRA programs. Those initiatives reportedly were the subject of separate criminal lawsuits brought by two different states.
Investors had charged Block with improperly booking revenues derived from allegedly deceptive consumer practices, according to the Kansas City Star. The plaintiffs claimed that Block’s stock price dropped as a result and that they were damaged by Block’s court-ordered restating of several years of financial statements, the paper reported.
Judge Ortrie Smith of the Western District of Missouri ruled that the plaintiffs provided insufficient evidence to support their claims, noting that Block repeatedly disclosed the problems in regulatory filings and that information about the problems was also available in public court filings, according to The Kansas City Star.
However, the nature of the ruling allows the plaintiffs to amend their complaint within the next 20 days, The Business Journal reported. In the amendment the plaintiffs must be able to prove that Block knew it had problems with its internal controls when it released materially false financial information.
“We are obviously very pleased by the court’s decision, especially because it vindicates both the company and several senior leaders,” Block spokesman Brian Levinson told The Star.