Marcus Lemonis, Chairman and CEO of Camping World, had another federal securities lawsuit filed against him and other company officers for allegedly selling stock at “artificially inflated prices.”
The lawsuit, filed Oct. 25 by investor Robert Strougo, represented by law firm Pomerantz, LLP, names Camping World Holdings, Lemonis, CFO Thomas Wolfe, President Brent Moody, director Stephen Adams and New York private-equity firm Crestview Partners II as defendants, reports Chicago Business. It seeks class-action status on behalf of people who purchased Camping World stock between March 8, 2017, and Aug. 7, 2018. The lawsuit claims investors, including Strougo, suffered significant losses and damages as the company’s stock, which once traded above $47 per share, fell to about $19 per share.
Camping World, headquartered in Lincolnshire, is majority owned and controlled by Lemonis and Crestview. The company went public with a $261 million initial public offering in October 2016 and announced that it would expand its operations, which historically specialized in RVs and related services, to include outdoor sporting supplies stores and accessories via its acquisition of Gander Mountain from bankruptcy.
The lawsuit accuses the defendants of making false and misleading statements about Camping World’s business, operational and compliance policies, including a failure to disclose that the company didn’t successfully integrate the assets from the Gander Mountain acquisition and that its profit margin was negatively impacted by the acquisition. The lawsuit alleges there were numerous errors and misstatements in every quarterly reporting period since the IPO.
Strougo claims in the lawsuit that the company issued a series of disclosures that it needed to withdraw and restate its prior financial statements for 2016 and the first three quarters of 2017, that it had fallen far behind previously provided 2018 earnings figures and that the integration and rollout of the Gander Mountain stores had suffered operational setbacks. He alleges the “defendants engaged in a plan, scheme, conspiracy and course of conduct” in which they “knowingly or recklessly engaged in acts, transitions, practices and courses of business which operated as a fraud and deceit” upon him and other investors.
Similar allegations were made by investor David Ronge in a federal securities lawsuit filed Oct. 19 in Illinois federal court. Additionally, Ronge accuses the same defendants of profiting “handsomely from their fraud.” He accuses them of engaging in a scheme intended to deceive investors, artificially inflate and maintain the market price of Camping World securities and prompt investors to acquire securities and options at artificially inflated prices.
In addition to being Camping World’s chairman and CEO, Lemonis stars in small-business-rescue reality show “The Profit” on CNBC.
When reached for comment, Lemonis said that because there are law firms that pursue these types of actions for a living, he expects there will be multiple people making the same claims. He declined to comment on the merits of the case since Camping World is a public company, but he said that it will be defended vigorously.