Shareholder sues Whitehall Jewellers for fraud

Whitehall Jewellers Inc. said recently that a shareholder has filed a securities fraud lawsuit accusing the company and some of its officers of artificially boosting the company’s stock price, Reuters reports.

The lawsuit, filed on Feb. 12 in U.S. District Court for the Northern District of Illinois, claims the defendants caused the specialty retailer’s shares to trade at artificially inflated levels by issuing false and misleading financial statements, Reuters reports.

The Chicago-based company said in a statement the accusations are without merit, Reuters reports.

In December, Whitehall Jewellers fired its chief financial officer over a different lawsuit that sparked probes by the Securities and Exchange Commission and the U.S. Justice Department.

Both Whitehall and jewelry chain Friedman’s Inc. are defendants in a lawsuit filed by Capital Factors Inc., a unit of banking company Union Planters Corp. In the lawsuit, Capital said it was defrauded by the actions of a former jewel vendor, Cosmopolitan Gem Corp. The lawsuit helped spawn the federal probes.