Kendall Law Group announced Monday a shareholder investigation of Zale Corporation for possible securities violations concerning admitted errors in their public statements affecting stock purchased between November 16th and October 29th.
On October 29th, Zale filed its annual report for the fiscal year ended July 31st. This report contained restated financial information for fiscal 2008 and 2009, which reflected accounting adjustments for advertising costs, intercompany accounts receivable, depository bank accounts, federal income taxes and personal property taxes. The report also disclosed that the United States Securities Exchange Commission is investigating the accounting issues that relate to the restatement of the 2008 and 2009 earnings.
In response to this announcement, Zale shares dropped nearly 26% by $1.66 per share, closing at $4.73 per share on October 30th, on unusually heavy volume.