DERIVATIVE LITIGATION FILED
Newman Ferrara with Congregations of Catholic Sisters File Suit Related to Smith & Wesson’s Marketing and Sale of AR-15 Assault Rifles (NASDAQ: SWBI)
New York, New York – Newman Ferrara LLP today announced that a coalition of four congregations of Catholic Sisters represented by the firm filed a stockholder derivative lawsuit naming officers and directors of Smith & Wesson Brands Inc. (“Smith & Wesson” or the “Company”) for wrongdoing related to the marketing and sale of AR-15-style assault weapons. The suit, filed in the Eighth Judicial District Court, Clark County, Nevada, alleges that the defendants breached their fiduciary duty to the Company and its stockholders by knowingly and intentionally violating federal, state, and local laws, thereby exposing the Company to significant liability.
“Much like the pharmaceutical companies being hammered by civil judgments and fines after enjoying years of profits from the sale of dangerous opioids, Smith & Wesson’s Board willfully ignores the potentially ruinous exposure the Company faces from its marketing and sale of weapons designed specifically for mass killing,” says Newman Ferrara partner Jeffrey Norton. “We are proud to partner with these congregations of Catholic Sisters who have long sought corporate responsibility through their shareholder activism.”
In connection with the lawsuit, the congregations of Catholic Sisters released the following joint statement:
As Catholic Sisters and women of faith who believe in the sanctity of life, our hearts ache at the exponential rise in gun deaths and mass shootings in our country that have ravaged the lives of so many children, women, men, their families, and communities. AR-15-style rifles, like those manufactured by Smith & Wesson, have been the weapon of choice for killers responsible for the deadliest mass shootings in American history. By design, they inflict the greatest number of casualties with maximum bodily harm in the shortest amount of time and are easily modified for automatic fire. These rifles have no purpose other than mass murder. They are not the sporting rifles that members of our own families and other responsible gun owners value.
As Smith & Wesson stockholders – and long-time proponents of corporate responsibility in the environmental, social and governance policies of companies in which we invest – we have sponsored resolutions that provide shareholders with an understanding of the company’s practices and exposure to risk and liability regarding the manufacture of AR-15 rifles. The most recent is a resolution calling for a third-party Human Rights Impact Assessment of the company’s practices in light of the significant and costly human rights risks the company faces. While the board recommended voting against the proposal at the September 2023 shareholder meeting, 26.7% of shareholders supported it.
Today, with the help of a team of lawyers from the New York law firm Newman Ferrara LLP, we filed a derivative complaint against the members of the Board and executive officers for breach of their fiduciary duties in prioritizing short-term profit over long-term risk. The company is intent on marketing and selling AR-15 rifles in whatever manner results in the most sales – even if the marketing is illegal and attracts a dangerous category of buyers, facilitates an unrelenting and growing stream of killings, and causes the company to face an ever-increasing and substantial likelihood of liability that threatens its long-term existence.
We call on Smith & Wesson to return to the practices of its first 153 years of existence when it held itself as a successful beacon of responsible gun ownership and did not manufacture, market, or sell military-grade, mass-killing assault weapons. We pray for an end to the AR-15 mass shootings that have stolen the lives of so many innocent people and devastated communities across the nation.
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The congregations of Catholic Sisters who, as stockholders, joined in filing
the derivative complaint against Smith & Wesson officers and directors are:
Adrian Dominican Sisters (Adrian, Michigan), Sisters of Bon Secours USA (Marriottsville, Maryland),
Sisters of St. Francis of Philadelphia (Aston, Pennsylvania), and
Sisters of the Holy Names of Jesus & Mary, U.S.-Ontario Province (Marylhurst, Oregon).
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Further details about the lawsuit are provided in the Verified Stockholder Derivative Complaint available at https://www.nfllp.com/cases/. All media inquiries should be directed to Newman Ferrara attorneys Jeffrey Norton (firstname.lastname@example.org) or Benjamin Baker (email@example.com).
Newman Ferrara maintains a multifaceted practice based in New York City with attorneys specializing in complex commercial and multi-party litigation, securities fraud and shareholder litigation, consumer protection, civil rights, and real estate. For more information, please visit the firm website at www.nfllp.com.
Newman Ferrara LLP
Jeffrey M. Norton
1250 Broadway, 27th Fl.
New York, NY 10001
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