Popular grocer and maker of asparagus water Whole Foods is dealing with yet another lawsuit. According to the Austin American-Statesman, the company is facing a federal lawsuit that accuses Whole Foods' top executives of "violating securities laws by deceiving shareholders and misrepresenting the value" of its stock.
The lawsuit claims Whole Food's co-CEOs John Mackey and Walter Robb, as well as the company's CFO Glenda Flanagan "artificially inflated the market price of Whole Foods securities" by making false statements because they did not disclose that the company "routinely overstated the weight of its prepackaged goods." It argues that because the executives failed to reveal the issue with labeling, it would "induce a reasonable investor to misjudge the value" of the company.
Whole Foods says the claims are false and that the company has always been transparent. A spokesperson tells CNBC: "Whole Foods Market is committed to providing transparent, accurate pricing for all of our customers, and we back that commitment with our 100 percent pricing accuracy guarantee... We have upheld our responsibility to our stakeholders, and are confident that this complaint is baseless and without merit." The lawsuit was filed last Thursday in Austin on behalf of plaintiff Yochanan Markman who hopes to turn this into a class action suit. He is seeking an unspecified amount of damages and wants a jury trial.
Earlier this summer, a New York City resident filed a lawsuit against Whole Foods for overcharging customers. His lawsuit was filed just a day after an investigation into the store by the New York City Department of Consumer Affairs found that packaged foods are routinely mislabeled in NYC locations, and have been since 2010. Inspectors weighed "80 different types of items at Whole Foods locations around the city and found that every label was inaccurate." Last year, the chain had to pay over $800,000 to settle a similar lawsuit in California.