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Class Action Lawsuit Against Publicly Traded Company

By Amy E. Feldman

PHILADELPHIA (CBS) - If you own shares of stock in a company, what does that company have to tell you about problems and when?

The first lawsuit was recently filed against Lululemon, the company that makes yoga products, including yoga pants that were revealed to be too revealing. Ohhm-my.

The lawsuit wasn't filed by the embarrassed wearers (or those who pretended to be embarrassed. Oh my, can you see too much of my tiny yoga heinie?), or even those standing behind them in class. But it is a class that's involved.

A class action lawsuit was filed by the shareholders - people who had bought stock in the company. They say that the company intentionally deceived them by hiding the defects and then by making investors think that Lululemon's market share - the percent of yoga clothing bought that was their product - was higher than it was by giving deep discounts to falsely bolster their numbers.

Under the law, a public company, that is a company whose shares are traded on a stock market, has a legal duty to reveal risk factors to its shareholders, the types of things that might make the company's share price sink along with its bottom line and your bottom.

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