Correction: This story was edited to omit a portion of the headline suggesting the suit's plaintiff alleged Ply Gem committed fraud.
A class action lawsuit brought forth by shareholder rights law firm Robbins Arroyo LLP alleges that Ply Gem violated the Securities Act of 1933 by failing to disclose information during its initial public offering in May, 2013.
According to the complaint, Ply Gem shares fell nearly 50% since the IPO, partly because of a supply agreement that required the company to sell Home Depot a large volume of products at lower prices and margins than normal. This agreement, says the suit, was not disclosed to potential investors.
The complaint also alleges that Ply Gem failed to disclose to investors that the company was experiencing labor inefficiencies due to the supply agreement with Home Depot, and that demand for Ply Gem's siding products was down in April and May, 2013.
In response to the suit, Ply Gem released this statement:
“As with any case, Ply Gem is unable to comment
on pending litigation. However, we intend to vigorously fight the claim.”