Foothill Ranch-based The Wet Seal Inc. said it was hit Friday with a suit that consolidates other class action complaints against the company.
Charges are directed against the company, some former directors and current and former executives of the teen apparel retailer.
The suit alleges Wet Seal and others charged violated securities law by making misleading statements and failing to disclose critical details about the company’s performance and ability to stem losses.
The complaint also charges that some former directors of Montreal’s La Senza Corp. used inside information to unfairly benefit from its sale of Wet Seal shares.
Last summer La Senza sold its 10% stake in Wet Seal. La Senza is a lingerie retail chain headed by former Wet Seal chairman Irv Teitelbaum, who stepped down last year after 20 years as chairman.
The consolidated suit, which was filed in the United States District Court for the Central District of California, seeks damages, interest, costs and attorney’s fees, among other things. Wet Seal said it plans to try to get the consolidated suit dismissed.
Wet Seal is in the midst of closing 150 stores and laying off 2,000 employees by the end of February in an effort to trim losses and stabilize the company. Prior to the closures, the company operated 463 Wet Seal stores and 96 Arden B. stores.
Last month Wet Seal wrapped up a $56 million convertible bond sale to help fund its turnaround.
