A US appeals court has paved the way for investors in Toshiba’s US-listed securities to revisit a case which the investors say cost them serious losses after the Japanese industrial conglomerate misled them over a 2015 accounting scandal.
In a 3-0 decision, the US Circuit Court of Appeals said a lower court judge was mistaken in dismissing the investors’ lawsuit, and that the investors should be permitted to file an amended complaint.
The appeals court said the investors did not sufficiently allege Toshiba committed a “domestic” violation of federal securities law, but that it would “not be futile” for them to try again.
Investors led by the Automotive Industries Pension Trust Fund sued in 2015 after Toshiba disclosed widespread accounting fraud.
In September 2015, Toshiba admitted to having overstated profit by roughly $1.3 billion over seven years.