Mattel

The complaint alleges that defendants failed to disclose the following adverse facts: (i) prior to and during the class period, Mattel’s retail customers were loaded with extremely high levels of unsold product; (ii) as a result of Mattel’s high levels of unsold inventory at its retailers, the Company was exposed to the heightened risk that it would have to issue its retailers financial concessions in the form of sales adjustments and discounts, to remove the excess inventory; (iii) the representations in Mattel’s Q3 Form 10-Q about its risk factors and disclosure controls were materially false and misleading; and (iv) as a result, defendants lacked a reasonable basis for their positive statements about Mattel’s then current business and future financial projections.