Target Corporation is facing a proposed class action lawsuit from a Florida pension fund, alleging that the company defrauded investors by failing to disclose the risks of its diversity initiatives. The City of Riviera Beach Police Pension Fund claims it invested in Target’s stock at an inflated price between August 2022 and November 2024, which plummeted after backlash to the company’s “diversity, equality, and inclusion” (DEI) program.
Lawyers say their client was unaware that its investment supported Target’s alleged misuse of investor funds for political and social goals. The plaintiffs also claim that Target hid the impact of right-wing backlash against its May 2023 Pride Campaign, which led to boycotts and attacks on employees.
Target stock fell by over 21% in November after disappointing earnings were reported, with Walmart’s strong earnings cited as a contributing factor. The lawsuit blames “continued backlash” from Target’s DEI initiative for the stock price drop.
The suit names Target, its CEO Brian Cornell, and the company’s boards as defendants. In response to the controversy, Target announced it will scale back several of its DEI initiatives in January, including ending three-year goals and discontinuing a program aimed at increasing products from minority-owned businesses.
Source: https://qz.com/target-suit-defrauding-shareholders-dei-1851754664