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Abraham, Fruchter & Twersky, LLP Announces Investigation of American Apparel, Inc.

^{Published on 2010-08-10 11:00:34 - Market Wire}
 

NEW YORK--([ BUSINESS WIRE ])--Abraham, Fruchter & Twersky, LLP has commenced an investigation concerning possible violations of state and federal securities laws by American Apparel, Inc. (aAmerican Apparela or the aCompanya) (AMEX: APP) related to the Companya™s December 31, 2009 financial statements.

"potential material errors to the [December 31, 2009] consolidated financial statements."

On March 31, 2010, the Company publicly disclosed an audit report issued by Deloitte & Touche, LLP (aDeloittea) which identified material weaknesses in American Apparela™s internal controls over financial reporting and their financial closing and reporting processes. These weaknesses led to deficiencies in the analyzing and recording of certain inventory costs, cost of sales, and the preparation of account analyses, account summaries and account reconciliations. The Company also did not perform adequate and independent reviews and maintain effective controls over the preparation of its financial statements. As a result, there is an increased likelihood of apotential material errors to the [December 31, 2009] consolidated financial statements.a The Company admitted their material weaknesses as of December 31, 2009 represent continuing material weaknesses identified as of December 31, 2008. On July 22, 2010, Deloitte resigned as the independent registered public accounting firm of American Apparel, having served the Company in that capacity since April 3, 2009. On July 29, 2010, after Deloittea™s resignation was announced to the public, American Apparel shares promptly dropped from $1.81 per share to close at $1.55 per share, on abnormally high trading volume.

If you purchased the common stock of American Apparel, Inc. between January 1, 2008 through July 29, 2010 and would like to discuss this action, or if you have any questions concerning this notice or your rights as a potential class member, you may contact: Jack G. Fruchter or Arthur J. Chen of Abraham, Fruchter & Twersky, LLP at 212-279-5050, or via e-mail at [ info@aftlaw.com ] or [ achen@aftlaw.com ], respectively.

Abraham, Fruchter & Twersky, LLP has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services.

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.