According to MSNBC, there are currently at least three proposed class-action lawsuits filed by Toyota investors against the carmaker. The groups claim Toyota mislead them through press releases, conference calls with stock analysts and TV interviews claiming the only problems with the cars are mechanical, when in fact it's all about electronics.
Even more, the groups claim this is a know fact within Toyota for at least a decade now, despite Toyota's repeated denials that there's nothing electronically with its cars.
As a result of Toyota's actions, the shareholders say, the stock have dropped 16 percent as of early March, closing last Thursday on the New York Stock Exchange (NYSE) at $79.34, a bit more than in the beginning of the month. Not enough of a recovery, the suing groups say, as they have lost "potentially" millions of dollars.
"This drop removed the inflation from Toyota's securities prices, causing real economic loss to investors who had purchased securities," Toyota stockholder Harry Stackhouse told MSNBC.
Now, one should look cautiously at the lawsuits and the claims of those who filed them. While this may not be the case with all the plaintiffs, Mr. Stackhouse owns... 40 shares in the Japanese carmaker, hardly making him a "strategic" investor and hardly placing him in the position of losing "millions of dollars".
And since all three plaintiffs bought Toyota shares last year, when the recall scandal was just beginning, all three had to file sworn statements saying they did not buy shares just as an excuse to sue the carmaker.
Regardless of the relationship the three have with Toyota, if the court finds they are right and Toyota tried to sweep something under the rug, the lawsuits may prove a tough nut to crack for Toyoda and Lentz.
"They clearly win on the materiality issue. This is going to be a matter that hits Toyota square in the eye," Duke University law professor James Cox told the source. "But the mere fact that you didn't disclose it isn't necessarily fault. It's whether you have a duty."