Case 1:20-cv-01966 Document 1 Filed 07/06/20 USDC Colorado Page 1 of 22
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`UNITED STATES DISTRICT COURT
`DISTRICT OF COLORADO
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`
`Case No. ___________
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`
`
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`JURY TRIAL DEMANDED
`
`
`UNITED FOOD AND COMMERCIAL
`WORKERS INTERNATIONAL UNION
`LOCAL 464A, THE TRUSTEES OF
`WELFARE AND PENSION FUNDS OF
`LOCAL 464A – PENSION FUND, THE
`TRUSTEES OF RETIREMENT PLAN FOR
`OFFICERS, BUSINESS
`REPRESENTATIVES AND OFFICE
`EMPLOYEES OF LOCAL 464A, THE
`TRUSTEES OF LOCAL 464A FINAST
`FULL TIME EMPLOYEES PENSION
`PLAN, THE TRUSTEES OF LOCAL 464A
`WELFARE AND PENSION BUILDING
`INC., and THE TRUSTEES OF NEW
`YORK-NEW JERSEY AMALGAMATED
`PENSION PLAN FOR ACME
`EMPLOYEES, Individually and on Behalf of
`All Others Similarly Situated,
`
`
`Plaintiffs,
`
`
`v.
`
`
`PILGRIM’S PRIDE CORPORATION,
`JAYSON J. PENN, WILLIAM W.
`LOVETTE, and FABIO SANDRI,
`
`
`Defendants.
`
`
`
`
`
`CLASS ACTION COMPLAINT
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`Plaintiffs United Food and Commercial Workers International Union Local 464A, the
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`Trustees of Welfare and Pension Funds of Local 464A – Pension Fund, the Trustees of Retirement
`
`Plan for Officers, Business Representatives and Office Employees of Local 464A, the Trustees of
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`Local 464A Finast Full Time Employees Pension Plan, the Trustees of Local 464A Welfare and
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`Case 1:20-cv-01966 Document 1 Filed 07/06/20 USDC Colorado Page 2 of 22
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`Pension Building Inc., and the Trustees of New York-New Jersey Amalgamated Pension Plan for
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`ACME Employees (“Local464A” or “Plaintiffs”) allege the following based upon personal
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`knowledge as to themselves and their own acts, and upon information and belief as to all other
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`matters, including the investigation of Plaintiffs’ counsel, which included, among other things, a
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`review of Defendants’ (defined below) United States Securities and Exchange Commission
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`(“SEC”) filings, wire and press releases published by Pilgrim’s Pride Corporation (“Pilgrim’s
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`Pride” or the “Company”), analyst reports and advisories about the Company, media reports
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`concerning the Company, judicial filings and opinions, and other publicly available information,
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`including the public record in United States v. Penn, No. 20-cr-00152-PAB (D. Colo.). Plaintiffs
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`believe that substantial additional evidentiary support will exist for the allegations set forth herein
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`after a reasonable opportunity for discovery.
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`I.
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`NATURE OF THE ACTION AND OVERVIEW
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`1.
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`This is a federal class action on behalf of a class of all persons and entities who
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`purchased or otherwise acquired Pilgrim’s Pride common stock between February 9, 2017, and
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`June 3, 2020, inclusive (the “Class Period”), seeking to pursue remedies under the Securities
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`Exchange Act of 1934 (the “Exchange Act”).
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`2.
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`Pilgrim’s Pride, a Delaware corporation headquartered in Greeley, Colorado, is one
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`of the largest chicken producers in the United States. Pilgrim’s Pride’s common stock trades on
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`the NASDAQ under the ticker symbol “PPC.”
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`3.
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`Throughout the Class Period, in annual reports and earnings calls, Defendants
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`touted the Company’s competitive strengths, advantages, and market positioning, which
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`Defendants claimed had been achieved through legitimate business strategies such as a broad
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`product portfolio and disciplined capital allocation.
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`4.
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`On June 3, 2020, however, investors learned the truth about the source of the
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`Company’s competitive advantages when the United States Department of Justice (the “DOJ”)
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`announced criminal charges (the “Indictment”) against two Pilgrim’s Pride high level executives
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`(including its current Chief Executive Officer) and two other executives in the chicken industry,
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`alleging that they and other unnamed co-conspirators had participated in an illegal antitrust
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`conspiracy to fix prices and rig bids from at least as early as 2012 and continuing through at least
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`early 2017.
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`5.
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`On this news, the price of Pilgrim’s Pride common stock declined $2.58 per share,
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`or approximately 12.4%, from a close of $20.87 per share on June 2, 2020, to close at $18.29 per
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`share on June 3, 2020.
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`6.
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`This Complaint alleges that, throughout the Class Period, Defendants made
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`materially false and/or misleading statements, as well as failed to disclose material adverse facts,
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`about the Company’s business and operations. Specifically, Defendants misrepresented and/or
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`failed to disclose that: (1) the Company and its executives had participated in an illegal antitrust
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`conspiracy to fix prices and rig bids from at least as early as 2012 and continuing through at least
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`early 2017; (2) the Company received competitive advantages, which persisted during the Class
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`Period, from its anticompetitive conduct; and (3) as a result, Defendants’ statements about the
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`Company’s business, operations, and prospects lacked a reasonable basis.
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`7.
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`As a result of Defendants’ wrongful acts and omissions, and the significant decline
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`in the market value of the Company’s common stock, Plaintiffs and other members of the Class
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`have suffered significant damages.
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`II.
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`JURISDICTION AND VENUE
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`8.
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`Plaintiffs’ claims arise under Sections 10(b) and 20(a) of the Exchange Act, 15
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`U.S.C. §§ 78j(b) and 78t(a), and the rules and regulations promulgated thereunder, including SEC
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`Rule 10b-5, 17 C.F.R. § 240.10b-5.
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`9.
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`This Court has jurisdiction over the subject matter of this action under 28 U.S.C. §
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`1331 and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.
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`10.
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`Venue is proper in this District under Section 27 of the Exchange Act, 15 U.S.C. §
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`78aa, and 28 U.S.C. § 1391(b), because Pilgrim’s Pride is headquartered in this District,
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`Defendants conduct business in this District, and many of the acts and conduct that constitute the
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`violations of law complained of herein, including the preparation and dissemination to the public
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`of materially false and misleading information, occurred in this District. In addition, the DOJ’s
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`criminal case against certain of the Defendants is pending in this District. See United States v.
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`Penn, No. 20-cr-00152-PAB (D. Colo.).
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`11.
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`In connection with the acts, conduct, and other wrongs alleged in this Complaint,
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`Defendants, directly or indirectly, used the means and instrumentalities of interstate commerce,
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`including the United States mails, interstate telephone communications, and the facilities of the
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`national securities markets.
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`III.
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`PARTIES
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`12.
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`Plaintiffs, as set forth in the accompanying certification, incorporated by reference
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`herein, purchased Pilgrim’s Pride common stock at artificially inflated prices during the Class
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`Period and have been damaged thereby.
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`13.
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`Defendant Pilgrim’s Pride is a Delaware corporation with its principal executive
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`offices located at 1770 Promontory Circle, Greeley, Colorado 80634.
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`14.
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`Defendant Jayson J. Penn (“Penn”) has been the Company’s President and Chief
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`Executive Officer since March 2019. Penn was also President of Pilgrim’s USA from October
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`2017 to March 2019, and an Executive Vice President at Pilgrim’s Pride from January 2012 to
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`October 2017. As of June 14, 2020, Penn is on a paid leave of absence from the Company.
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`15.
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`Defendant William W. Lovette (“Lovette”) was, from January 2011 to March 2019,
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`the Company’s President and Chief Executive Officer. Lovette was also a Company director from
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`February 2011 to March 2019.
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`16.
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`Defendant Fabio Sandri (“Sandri”) has been the Company’s Chief Financial Officer
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`since June 2011. Additionally, as of June 14, 2020, Sandri is the Company’s interim President
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`and Chief Executive Officer.
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`17.
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`Defendants Penn, Lovette, and Sandri are collectively referred to herein as the
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`“Individual Defendants.”
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`18.
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`The Individual Defendants, because of their positions with the Company, possessed
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`the power and authority to control the contents of Pilgrim’s Pride reports to the SEC, press releases,
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`and presentations to securities analysts, money and portfolio managers, and institutional investors,
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`i.e., the market. Each Individual Defendant was provided with copies of the Company’s reports
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`alleged herein to be misleading prior to, or shortly after, their issuance and had the ability and
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`opportunity to prevent their issuance or cause them to be corrected. Because of their positions and
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`access to material non-public information available to them, each of the Individual Defendants
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`knew that the adverse facts specified herein had not been disclosed to, and/or were being concealed
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`from, the public, and that the positive representations that were being made were then materially
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`false and/or misleading.
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`19.
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`Pilgrim’s Pride and the Individual Defendants are collectively referred to herein as
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`“Defendants.”
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`IV.
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`SUBSTANTIVE ALLEGATIONS
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`20.
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`Pilgrim’s Pride is a large, vertically integrated producer of meat products. The
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`majority of Pilgrim’s Pride’s annual sales arise from chicken products, which the Company
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`primarily sells to grocers and chain restaurants.
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`A.
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`21.
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`Defendants’ False and Misleading Statements
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`The Class Period begins on February 9, 2017, to coincide with the filing of
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`Pilgrim’s Pride’s annual report for the year ended December 31, 2016, with the SEC on Form 10-
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`K (the “2016 Annual Report”). In the 2016 Annual Report, which was signed by, inter alia,
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`Defendants Lovette and Sandri, Defendants touted the Company’s “competitive strengths” and
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`represented, in relevant part:
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`Leading market position in the growing chicken industry. We are one of the
`largest chicken producers globally and a leading chicken producer in the U.S. with
`an approximate 16.6% market share, based on ready-to-cook production in 2016,
`according to WATTPoultryUSA magazine. We believe we can maintain this
`prominent market position as we are one of the few producers in the chicken
`industry that can fully satisfy the requirements of large retailers and foodservice
`companies due to our broad product range, national distribution, vertically
`integrated operations and technical capabilities. Further, our scale of operations,
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`balanced product portfolio and a wide range of production capabilities enable us to
`meet both the capacity and quality requirements of our customer base. Finally, we
`believe we are well positioned with our global footprint to benefit from the growth
`in the U.S. chicken export market.
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`22.
`
`The 2016 Annual Report also listed a “broad product portfolio,” a “blue chip and
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`diverse customer base across all industry segments,” a “lean and focused enterprise,” “robust cash
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`flow generation with disciplined capital allocation,” an “experienced management team and
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`results-oriented corporate culture,” and a “relationship with JBS [S.A.]”—the Company’s majority
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`shareholder—as “competitive strengths” that would “enable [the Company] to maintain and grow
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`[its] position as a leading chicken company and to capitalize on future favorable growth
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`opportunities.”
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`23.
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`The 2016 Annual Report further represented that Pilgrim’s Pride’s “full-line
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`product capabilities, high-volume production capacities, research and development expertise and
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`extensive distribution and marketing experience are competitive strengths compared to smaller
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`and non-vertically integrated producers.”
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`24.
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`As required by the Sarbanes-Oxley Act of 2002, Defendants Lovette and Sandri
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`certified that they had reviewed the 2016 Annual Report and that it “does not contain any untrue
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`statement of a material fact or omit to state a material fact necessary to make the statements made,
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`in light of the circumstances under which such statements were made, not misleading with respect
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`to the period covered by this report.”
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`25.
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`Similarly, during a May 4, 2017 earnings call, Defendant Lovette represented to
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`investors that “[w]e price our retail products and our food service products based on the value that
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`we deliver to our key customers and we have various mechanisms for doing that” and “[t]hat’s
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`part of the diversity of our portfolio, which we think is a competitive advantage.”
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`26.
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`In another earnings call on February 15, 2018, Defendant Lovette stated that the
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`Company “believe[s] industry growth over the next few years will continue to be well supportive
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`of a balanced supply and demand environment, and we’re confident that our business will have
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`the ability to outperform given our broad portfolio and presence in all bird categories as well as
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`strong relationships with our key customers.” Defendant Lovette further claimed that the
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`Company’s “key customer approach is strategic, and it creates an opportunity to further accelerate
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`growth in important categories by providing a more differentiated product portfolio and giving us
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`a competitive advantage.”
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`27.
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`On February 16, 2018, Pilgrim’s Pride filed its annual report for the year ended
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`December 31, 2017, with the SEC on Form 10-K (the “2017 Annual Report”). In the 2017 Annual
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`Report, which was signed by, inter alia, Defendants Lovette and Sandri, Defendants again touted
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`the Company’s “competitive strengths”—including a “broad product portfolio,” a “blue chip and
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`diverse customer base across all industry segments,” a “lean and focused enterprise,” an
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`“experienced management team and results-oriented corporate culture,” and a “relationship with
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`JBS [S.A.]”—which, Defendants claimed, would “enable [the Company] to maintain and grow
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`[its] position as a leading chicken company and to capitalize on future favorable growth
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`opportunities.”
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`28.
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`Like the 2016 Annual Report, the 2017 Annual Report also stated that Pilgrim’s
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`Pride’s “full-line product capabilities, high-volume production capacities, research and
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`development expertise and extensive distribution and marketing experience are competitive
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`strengths compared to smaller and non-vertically integrated producers.”
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`29.
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`As required by the Sarbanes-Oxley Act of 2002, Defendants Lovette and Sandri
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`certified that they had reviewed the 2017 Annual Report and that it “does not contain any untrue
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`statement of a material fact or omit to state a material fact necessary to make the statements made,
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`in light of the circumstances under which such statements were made, not misleading with respect
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`to the period covered by this report.”
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`30.
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`Defendants continued to represent to investors that the Company’s competitive
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`advantages resulted from legitimate business strategies. For example, during an earnings call on
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`August 2, 2018, Defendant Lovette stated:
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`While we’re already well-balanced in terms of our bird-size exposure, we will
`continue to look for opportunities to shift our product mix and reduce the
`commodity portion of our portfolio by offering a more differentiated product to key
`customers while also optimizing our existing operations to pursuing our operational
`improvement targets. We believe our key customer approach is strategic and creates
`a basis to further accelerate growth in important categories by providing a more
`customized and innovative products [sic] to give us a clear competitive advantage.
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`31.
`
`On February 14, 2019, Pilgrim’s Pride filed its annual report for the year ended
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`December 31, 2018, with the SEC on Form 10-K (the “2018 Annual Report”). In the 2018 Annual
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`Report, Defendants again touted the Company’s “competitive strengths”—including a “broad
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`product portfolio,” a “blue chip and diverse customer base across all industry segments,” a “lean
`
`and focused enterprise,” an “experienced management team and results-oriented corporate
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`culture,” and a “relationship with JBS [S.A.]”—which, Defendants claimed, would “enable [the
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`Company] to maintain and grow [its] position as a leading chicken company and to capitalize on
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`future favorable growth opportunities.”
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`32.
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`Like the 2016 and 2017 Annual Reports, the 2018 Annual Report also stated that
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`Pilgrim’s Pride’s “full-line product capabilities, high-volume production capacities, research and
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`development expertise and extensive distribution and marketing experience are competitive
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`strengths compared to smaller and non-vertically integrated producers.”
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`33.
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`As required by the Sarbanes-Oxley Act of 2002, Defendants Lovette and Sandri
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`certified that they had reviewed the 2018 Annual Report and that it “does not contain any untrue
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`statement of a material fact or omit to state a material fact necessary to make the statements made,
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`in light of the circumstances under which such statements were made, not misleading with respect
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`to the period covered by this report.”
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`34.
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`Again, Defendants continued to tout the Company’s “competitive advantages,”
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`which were purportedly obtained through legitimate means. On a February 14, 2019 earnings call,
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`for example, Defendant Lovette repeated his previous representations that the Company’s “key
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`customer approach is strategic and creates the basis to further accelerate growth in important
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`categories by providing them more customized and innovative products to give us a clear
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`competitive advantage.”
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`35.
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`Similarly, during an earnings call on May 2, 2019, Defendant Penn represented to
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`investors that the Company’s “leading positions in these markets and differentiated product
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`offerings have continued to give us competitive advantage relative to our peers with a more narrow
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`market approach.” Penn substantially repeated this statement during earnings calls on August 1,
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`2019, and October 31, 2019.
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`36.
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`On February 21, 2020, Pilgrim’s Pride filed its annual report for the year ended
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`December 31, 2019, with the SEC on Form 10-K (the “2019 Annual Report”). In the 2019 Annual
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`Report, which was signed by, inter alia, Defendants Penn and Sandri, Defendants stated that the
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`Company “utilize[s] numerous advertising and marketing techniques to develop and strengthen
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`trade and consumer awareness and increase brand loyalty for consumer products,” and “believe[s]
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`[the Company’s] efforts to achieve and maintain brand awareness and loyalty help to achieve
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`greater price premiums than would otherwise be the case in certain markets and support and
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`expand [the Company’s] product distribution.”
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`37.
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`As required by the Sarbanes-Oxley Act of 2002, Defendants Penn and Sandri
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`certified that they had reviewed the 2019 Annual Report and that it “does not contain any untrue
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`statement of a material fact or omit to state a material fact necessary to make the statements made,
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`in light of the circumstances under which such statements were made, not misleading with respect
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`to the period covered by this report.”
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`38.
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`During an earnings call that same day, Defendant Penn again stated that “[o]ur
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`market leadership in these categories and more differentiated product portfolio have continued to
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`support the growth of our competitive advantage versus the industry.”
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`39.
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`Defendant Penn repeated this statement on April 30, 2020, representing that “[o]ur
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`market leadership in these categories and more differentiated product portfolios have continued to
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`strengthen the growth of our competitive advantage versus the industry.”
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`40.
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`Defendants’ statements about the Company’s competitive advantage, strengths, and
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`market positioning in the chicken industry were materially false and/or misleading when made
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`because Defendants misrepresented and/or failed to disclose that: (1) the Company and its
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`executives had participated in an illegal antitrust conspiracy to fix prices and rig bids from at least
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`as early as 2012 and continuing through at least early 2017; (2) the Company received competitive
`
`advantages, which persisted during the Class Period, from its anticompetitive conduct; and (3) as
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`a result, Defendants’ statements about the Company’s business, operations, and prospects lacked
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`a reasonable basis.
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`B.
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`41.
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`The Truth Emerges
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`Plaintiffs and other investors began to learn the truth about the source of the
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`Company’s purported competitive strengths and advantages on June 3, 2020, when the DOJ
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`announced that a federal grand jury in the District of Colorado had returned the Indictment
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`charging four executives in the chicken industry with criminal antitrust violations: Defendant
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`Penn; Roger Austin, a former Pilgrim’s Pride Vice President; Mikell Fries, President of Claxton
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`Poultry Farms (“Claxton”); and Scott Brady, a former Pilgrim’s Pride Vice President, who became
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`a Vice President at Claxton in 2012 (collectively, the “DOJ Defendants”).
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`42.
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`The Indictment alleges that the DOJ Defendants, as well as other co-conspirators—
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`including Defendant Lovette, who is not specifically named in the Indictment but is identifiable
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`by title—violated the Sherman Act by “participating in a continuing network of Suppliers and co-
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`conspirators, an understood purpose of which was to suppress and eliminate competition through
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`rigging bids and fixing prices and price-related terms for broiler chicken products sold in the
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`United States.”
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`43.
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`The Indictment additionally alleges that in order to further the conspiracy, the DOJ
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`Defendants utilized their network of suppliers and co-conspirators from at least as early as 2012
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`and continuing through at least early 2017 to: “reach agreements and understandings to submit
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`aligned, though not necessarily identical, bids and to offer aligned, though not necessarily
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`identical, prices, and price-related terms, including discount levels”; “participate in conversations
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`and communications relating to non-public information such as bids, prices, and price-related
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`terms, including discount levels, . . . with the shared understanding that the purpose of the
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`conversations and communications was to rig bids, and to fix, maintain, stabilize, and raise prices
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`and other price-related terms, including discount levels”; and “monitor bids submitted by, and
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`prices and price-related terms, including discount levels, offered by, Suppliers and co-
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`conspirators.”
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`44.
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`Using detailed information regarding phone calls, text messages, and relevant
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`documents, the Indictment sets forth seven specific instances in which the DOJ Defendants and
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`other co-conspirators, including Defendant Lovette, illegally and improperly coordinated on the
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`prices, including discounts, and bids that supplier companies, including Pilgrim’s Pride and
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`Claxton, offered to chicken purchasers.
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`45.
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`For example, as detailed in the Indictment, in 2014, suppliers were negotiating with
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`a purchasing cooperative over prices that would take effect in 2015. According to the Indictment,
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`Pilgrim’s Pride employees, including DOJ Defendant Austin, communicated with other suppliers
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`regarding the range of margin increases the suppliers would be proposing to the purchasing
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`cooperative, and an unnamed Pilgrim’s Pride employee compiled a price proposal for Defendant
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`Penn that included the contemplated 2015 margins for at least four competitor suppliers. DOJ
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`Defendants Penn, Austin, Brady, and Fries then engaged in a number of communications, via
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`phone and text message—including between Austin, at Pilgrim’s Pride, and Brady, at Claxton—
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`regarding whether Pilgrim’s Pride, Claxton, or other suppliers would lower their prices.
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`Specifically, Brady instructed Austin “not to come down on price.”
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`46.
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`According to the Indictment, during another 2014 instance of improper price
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`coordination, Defendant Penn exchanged text messages with an unnamed Pilgrim’s Pride
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`employee, who stated that “[t]hey are listening to my direction” regarding a negotiation with a
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`national restaurant chain. Defendant Penn said, “Who is they?” and then, “If they is illegal don’t
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`tell me,” further demonstrating that Penn was aware the Company was participating in illegal,
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`anticompetitive conduct.
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`47.
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`The Indictment also sets forth a separate instance of “protecting the purpose and
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`effectiveness of the conspiracy.” In November 2014, a different, unnamed supplier (“Supplier-3”)
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`asked to purchase broiler chicken products from Pilgrim’s Pride to cover a shortfall to an unnamed
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`grocer for approximately $0.05/lb. more than the price Pilgrim’s Pride had negotiated with the
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`grocer. Defendant Penn sent a series of emails to other Pilgrim’s Pride employees, discussing how
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`to make the supplier “pay for poor decision making” so “they start acting appropriately.” Penn
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`then asked for Defendant Lovette’s thoughts on whether to make the supplier “feel the pain across
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`their system so they can start making decisions commensurate with a profitable venture and not a
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`philanthropic organization.” In response, Lovette said: “No question in my mind. [Supplier-3]
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`should have to live with the decision they made. We made ours and are dealing with it. Why
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`should it be any different for them? We SHOULD NOT HELP THEM ONE MICRON.” The
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`following month, Penn also said to Lovette: “[Supplier-3] took this strategy of not worrying about
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`what the competition is doing and it led to the unraveling on [sic] a competitive advantage. Have
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`to keep our enemies close and ensure that we are not zigging when the competition is successfully
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`zagging.”
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`48.
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`In response to the announcement of the Indictment, the price of Pilgrim’s Pride
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`common stock declined $2.58 per share, or 12.4%, from a close of $20.87 per share on June 2,
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`2020, to close at $18.29 per share on June 3, 2020.
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`V.
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`PLAINTIFFS’ CLASS ACTION ALLEGATIONS
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`49.
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`Plaintiffs bring this class action under Rule 23 of the Federal Rules of Civil
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`Procedure on behalf of all persons who purchased Pilgrim’s Pride common stock during the Class
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`Period (the “Class”). Excluded from the Class are Defendants, their agents, directors and officers
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`of Pilgrim’s Pride, and their families and affiliates.
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`50.
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`The members of the Class are so numerous that joinder of all members is
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`impracticable. The disposition of their claims in a class action will provide substantial benefits to
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`the parties and the Court.
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`51.
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`There is a well-defined community of interest in the questions of law and fact
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`involved in this case. Questions of law and fact common to the members of the Class which
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`predominate over questions which may affect individual Class members include:
`
`a.
`
`b.
`
`c.
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`Whether Defendants violated the Exchange Act;
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`Whether Defendants omitted and/or misrepresented material facts;
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`Whether Defendants’ statements omitted material facts necessary in
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`order to make the statements made, in light of the circumstances
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`under which they were made, not misleading;
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`d.
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`Whether Defendants knew or recklessly disregarded that their
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`statements were false and misleading;
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`e.
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`Whether the price of Pilgrim’s Pride common stock was artificially
`
`inflated; and
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`f.
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`The extent of damage sustained by members of the Class and the
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`appropriate measure of damages.
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`Case 1:20-cv-01966 Document 1 Filed 07/06/20 USDC Colorado Page 16 of 22
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`52.
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`Plaintiffs’ claims are typical of those of the Class because Plaintiffs and the Class
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`sustained damages from Defendants’ wrongful conduct.
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`53.
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`Plaintiffs will adequately protect the interests of the Class and has retained counsel
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`who are experienced in securities class actions. Plaintiffs have no interests that conflict with those
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`of the Class.
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`54.
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`A class action is superior to other available methods for the fair and efficient
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`adjudication of this controversy.
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`VI. APPLICABILITY OF PRESUMPTION OF RELIANCE: FRAUD-ON-THE-
`MARKET DOCTRINE
`
`55.
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`Plaintiffs will rely upon the presumption of reliance established by the fraud-on-
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`the-market doctrine in that, among other things:
`
`a.
`
`Defendants made public misrepresentations or failed to disclose
`
`b.
`
`c.
`
`d.
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`material facts during the Class Period;
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`The omissions and misrepresentations were material;
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`The Company’s common stock traded in an efficient market;
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`The misrepresentations alleged would tend to induce a reasonable
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`investor to misjudge the value of the Company’s common stock; and
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`e.
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`Plaintiffs and the Class purchased Pilgrim’s Pride common stock
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`between the time Pilgrim’s Pride and the Individual Defendants
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`misrepresented or failed to disclose material facts and the time the
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`true facts were disclosed, without knowledge of the misrepresented
`
`or omitted facts.
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`Case 1:20-cv-01966 Document 1 Filed 07/06/20 USDC Colorado Page 17 of 22
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`56.
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`At all relevant times, the market for Pilgrim’s Pride common stock was efficient
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`because: (1) as a regulated issuer, Pilgrim’s Pride filed periodic public reports with the SEC; and
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`(2) Pilgrim’s Pride regularly communicated with public investors using established market
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`communication mechanisms, including through regular disseminations of press releases on the
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`major news wire services and through other wide-ranging public disclosures, such as
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`communications with the financial press, securities analysts, and other similar reporting services.
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`VII. NO SAFE HARBOR
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`57.
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`Defendants’ “Safe Harbor” warnings accompanying any forward-looking
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`statements issued during the Class Period were ineffective to shield those statements from liability.
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`Defendants are liable for any false and/or misleading forward-looking statements pleaded because,
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`at the time each forward-looking statement was made, the speaker knew the forward-looking
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`statement was false or misleading and the forward-looking statement was authorized and/or
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`approved by an executive officer of Pilgrim’s Pride who knew that the forward-looking statement
`
`was false. None of the historic or present-tense statements made by Defendants were assumptions
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`underlying or relating to any plan, projection, or statement of future economic performance, as
`
`they were not stated to be such assumptions underlying or relating to any projection or statement
`
`of future economic performance when made, nor were any of the projections or forecasts made by
`
`Defendants expressly related to or stated to be dependent on those historic or present-tense
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`statements when made.
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`VIII. LOSS CAUSATION/ECONOMIC LOSS
`
`58.
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`Defendants’ wrongful conduct directly and proximately caused the economic loss
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`suffered by Plaintiffs and the Class. The price of Pilgrim’s Pride common stock significantly
`
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`Case 1:20-cv-01966 Document 1 Filed 07/06/20 USDC Colorado Page 18 of 22
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`declined when the misrepresentations made to the market, and/or the information alleged herein
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`to have been concealed from the market, and/or the effects thereof, were revealed, causing
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`investors’ losses. As a result of their purchases of Pilgrim’s Pride common stock during the Class
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`Period, Plaintiffs and the Class suffered economic loss, i.e., damages, under the federal securities
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`laws.
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`IX.
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`SCIENTER ALLEGATIONS
`
`59.
`
`During the Class Period, Defendants had both the motive and opportunity to
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`commit fraud. They also had actual knowledge of the misleading nature of the statements they
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`made, or acted in reckless disregard of the true information known to them at the time. In so doing,
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`Defendants participated in a scheme to defraud and committed acts, practices, and participated in
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`a course of business that operated as a fraud or deceit on purchasers of Pilgrim’s Pride common
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`stock during the Class Period.
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`X.
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`CLAIMS AGAINST DEFENDANTS
`
`COUNT I
`
`Violation of Section 10(b) of the Exchange Act and
`SEC Rule 10b-5 Promulgated There