Former Disney CEO Bob Chapek, Current CFO Named in Shareholder Lawsuit Alleging ‘Fraudulent’ Streaming Statements

variety.com:

J. Kim Murphy Bob Chapek, the former Disney CEO who was abruptly ousted from the company last November, is among a group of executives facing a lawsuit claiming violations of securities law for allegedly providing misleading statements and omissions about Disney+ and its subscriber growth.

The case, filed by Local 272 Labor Management Pension Fund on May 12 in the U.S. District Court for the Central District of California, also names former Disney executive Kareem Daniel and current CFO Christine McCarthy, as well as the Walt Disney Co.

itself, as defendants. The document states that the case seeks a lead plaintiff and judicial determination for a class action suit representing Disney shareholders from Dec.

10, 2020 to Nov. 8, 2022. “Each of the Individual Defendants was directly involved in the management and day-to-day operations of the Company at the highest levels and was privy to confidential proprietary information concerning the Company and its business, operations, services, plans, and present and future business prospects,” reads the 39-page document. “In addition, the Individual Defendants were involved in drafting, producing, reviewing and/or disseminating the false and misleading statements and information alleged herein, and were aware of, or recklessly disregarded, the false and misleading statements being issued regarding the Company, and approved or ratified these statements, in violation of the federal securities laws.” The lawsuit alleges that Chapek and other executives did not properly disclose the truthful state of Disney, specifically its projections for Disney+ subscriber numbers and the company’s overall health in the streaming industry.