Toll Brothers Settles Investor Class Action for $25 Million

Toll Brothers, a builder of luxury homes in the US, has agreed to pay US$ 25 million to settle a long-running class action lawsuit alleging it misled investors about its financial health during the downturn in the US housing market.

Filed in April 2007, the lawsuit against the Toll Brothers was among the first of the subprime-related securities suits. The complaint alleged that the company made a series of false and misleading statements indicating that its business model was immune from the adverse economic conditions affecting the mainstream housing market. Specifically, "Contrary to the positive statements defendants were making publicly they knew that a number of adverse developments were negatively impacting their business and signalling much slower growth than they were leading investors to expect."

US district Judge Daniel Jones stipulated in the filing that the US$ 25 million be paid to investors who bought Toll Brothers shares between 9 December 2004 and 8 November 2005.

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Published on Nov-9-10