Norwegian Cruise Lines’ Alleged False and Misleading Statements Regarding Cornavirus (COVID-19) Subject of Class Action Lawsuit
Norwegian Cruise Line Investors Who Purchased, Or Otherwise Acquired, Shares of NCLH During the Class Period Between February 20, 2020 and March 12, 2020, Inclusive, Are Encouraged To Contact Kehoe Law Firm, P.C.
Kehoe Law Firm, P.C. is investigating securities claims on behalf of investors of Norwegian Cruise Lines and is making investors aware that on March 12, 2020, a class action lawsuit was filed in United States District Court, Southern District of Florida, against Norwegian Cruise Lines (“Norwegian” or the “Company”) (NYSE: NCLH) and certain Company executives on behalf of investors of Norwegian Cruise Lines who purchased, or otherwise acquired, the publicly-traded securities of Norwegian from February 20, 2020 through March 12, 2020, inclusive (the “Class Period”).
The class action lawsuit seeks to recover compensable damages for Norwegian shareholders who suffered losses as a result of the Defendants’ alleged violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
NCLH Stock Drops On News Of Miami New Times Article: “Leaked Emails: Norwegian Pressures Sales Team to Mislead Potential Customers About Coronavirus”
According to the class action complaint:
On March 11, 2020, Miami New Times reported in the article “Leaked Emails: Norwegian Pressures Sales Team to Mislead Potential Customers About Coronavirus” that leaked emails from a Norwegian employee showed that the Company directed its sales staff to lie to customers regarding COVID-19. The article stated, in pertinent part:
In the wake of the epidemic, a Norwegian Cruise Line (NCL) employee in South Florida tells New Times some managers have asked sales staff to lie to customers about COVID-19 to protect the company’s bookings.
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Emails leaked to [Miami New Times] show that a senior sales manager at NCL’s Miami office came up with canned responses for the sales team to use if potential customers expressed concerns about COVID-19.
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Some of the lines in the script pressure a fictitious customer to book a cruise immediately to avoid paying more later. “Mr Becker,” the line reads, “due to the Coronavirus we have cancelled all of our Asia cruises on the Norwegian Spirit. This has caused a huge surge in demand for all of our other itineraries. I suggest we secure your reservation today to avoid you paying more tomorrow.” (News reports, on the other hand, suggest cruise lines are suffering from a spate of canceled trips rather than experiencing high demand. NCL’s stock price has fallen more than 35 percent in recent days.)
Other script lines simply reassure customers not to be afraid.
“The only thing you need to worry about for your cruise is do you have enough sunscreen?” one of the suggested talking points reads.
Some of the recommended responses are blatantly false. For instance, cruise bookers were instructed to tell potential customers that coronavirus is not a concern in warm Caribbean climates.
“The Coronavirus can only survive in cold temperatures, so the Caribbean is a fantastic choice for your next cruise,” one talking point reads.
“Scientists and medical professionals have confirmed that the warm weather of the spring will be the end of the Coronavirus,” reads a second.
Another line says coronavirus “cannot live in the amazingly warm and tropical temperatures that your cruise will be sailing to.”
According to the class action complaint,
. . . the Miami New Times article revealed the financial impact the COVID-19 outbreak was causing on the Company and its employees, stating in part:
“We are hardly selling anything,” the employee says. “Sales are at serious lows.”
Members of the sales team lose any commission on a booking if the cruise is canceled, according to the employee. They are required to meet daily quotas — about 150 calls to potential customers, five hours on the phone, and three to five bookings.
“If you don’t hit quota, you will absolutely be fired,” the employee says. “No exceptions for [the] current virus situation. You may be put on a personal improvement plan for 30 days, but [that] basically means you’re done.”
The employee says managers are trying to downplay the disruption in sales “at all costs.”
On March 11, 2020, Norwegian’s stock shares, according to the class action complaint, dropped $5.47 per share, or approximately 26.7%, on this news.
NCHL Stock Drops On News Of Washington Post Article: “Norwegian Cruise Line managers urged salespeople to spread falsehood about coronavirus”
According to the class action complaint:
On March 12, 2020, [The] Washington Post published the article, “Norwegian Cruise Line managers urged salespeople to spread falsehoods about coronavirus.” The article revealed even more about Norwegian’s sales tactics from leaked internal memoranda including dangerous statements such as:
“Focusing all of your attention is actually illogical, especially when we live in a world of daily threats and dangers anyhow,” the manager wrote under the headline “The coronavirus will not affect you.” “Fact: Coronavirus in humans is an overhyped pandemic scare.”
[The] Washington Post article also disclosed Company executive’s reaction to the leaked memorandum, including:
The whistleblower told The Post that company leaders are trying to find out who shared the emails. In one email sent Monday evening, after a [Miami New Times] journalist contacted the company, an executive wrote, “One of our own ratted.” [Emphasis added in original].
On March 12, 2020, Norwegian’s stock shares, according to the class action complaint, dropped another $5.38, or approximately 35.8%, on this news.
Norwegian Cruise Line Investors Who Purchased, Or Otherwise Acquired, NCLH Securities During The Class Period and Suffered Losses
Norwegian Cruise Line investors who purchased, or otherwise acquired, the publicly-traded securities of Norwegian during the Class Period between February 20, 2020 and March 12, 2020, inclusive, and suffered losses are encouraged to contact either Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], or John Kehoe, Esq, (215) 792-6676, Ext. 801, [email protected], to learn more about the Norwegian Cruise Lines securities investigation or potential legal claims.