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In a
complaint filed in Chicago federal court, Jacob Newman accused
Caterpillar of defrauding him and other shareholders in
regulatory filings by touting its commitment to good ethics,
while concealing how it "unlawfully used foreign subsidiaries"
to avoid paying billions of dollars of U.S. taxes.
Caterpillar did not immediately respond to requests for comment
after business hours.
Shares of Caterpillar fell 4.3 percent on Thursday, wiping out
more than $2.4 billion of the Peoria, Illinois-based company's
market value.
The company said it believed the raid by officials from agencies
including the Internal Revenue Service's criminal investigation
division, the Department of Commerce and the Federal Deposit
Insurance Corp was connected with an IRS probe related to a
Swiss parts unit, Caterpillar SARL.
Caterpillar has been fighting an IRS demand that it pay $2
billion in taxes and penalties for shifting profit to the Swiss
unit to lessen its U.S. tax bill.
Newman is seeking unspecified damages in his proposed
class-action lawsuit on behalf of Caterpillar investors from
Feb. 19, 2013 through March 1.
The lawsuit also names Caterpillar Chief Executive Jim Umpleby,
Chairman Douglas Oberhelman and Chief Financial Officer Bradley
Halverson as defendants. Oberhelman preceded Umpleby as chief
executive.
Companies often face U.S. lawsuits accusing them of securities
fraud shortly after unexpected negative news causes a decline in
their stock prices. It is unclear how many lawsuits Caterpillar
might face.
The case is Newman v. Caterpillar Inc et al, U.S. District
Court, Northern District of Illinois, No. 17-01713.
(Reporting by Jonathan Stempel in New York; Editing by Cynthia
Osterman)
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