Mechel, one of the leading Russian mining and steel groups, is being sued in a US federal court in the Southern District of New York by an American private investor, Dean Frederick. The plaintiff has alleged that the company committed security frauds by not disclosing to potential investors information about the 2008 antidumping investigation initiated against it by the Russian Federal Antimonopoly Service, and also by failing to reveal adverse facts relating to the company's financial well-being, business relationships and prospects.
Mr. Dean Frederick is asking all investors who acquired Mechel stock between October 3, 2007 and July 25, 2008, to join in the class action lawsuit.
In July and August 2008, Russian Prime Minister Vladimir Putin twice criticized Mechel over its pricing policy. Following these criticisms, during a single week Mechel lost half its market value on the New York Stock Exchange.
According to Russian experts, the company had not expected such a turnaround in its financial statements, and so it makes no sense to blame Mechel for not disclosing information.