Shareholder sues MGM Mirage over stock prices
LAS VEGAS — Casino operator MGM Mirage is facing a federal lawsuit from a shareholder who says the company’s executives misled investors about its financial position and profited from selling stock at high prices.
The lawsuit filed late Wednesday in U.S. District Court in Nevada seeks class action status on behalf of shareholders who bought stock between August 2007 and March 2009.
Lawyers for Robert Lowinger, who bought stock during the 18-month period, said MGM Mirage insiders sold personal stock worth nearly $90 million at high prices before reports of financial problems at the company and its largest development became public.
The 76-page complaint says the company’s executives, including former CEO Terrence Lanni, current CEO Jim Murren, CFO Dan D’Arrigo and Chief Design and Construction Officer Robert Baldwin, were aware of and “recklessly disregarded” false statements made publicly by the company.
A spokesman for the Las Vegas-based MGM Mirage said Thursday that the company had not reviewed the lawsuit, but has never lied to its followers.
“We have never made any false or misleading statements to our shareholders or the public about our company’s financial status or those of CityCenter,” spokesman Alan Feldman said.
The $8.5 billion CityCenter on the Las Vegas Strip — the centerpiece of MGM Mirage’s development strategy — is scheduled to open in phases in December. The project is a 50-50 partnership between MGM Mirage and Dubai World, the investment arm of the Persian Gulf state that also has a stake in MGM Mirage itself.
After an economic downturn began battering casinos everywhere, investors and Wall Street analysts questioned whether MGM Mirage would avoid bankruptcy and be able to finish CityCenter on time.
MGM Mirage restructured some of its debt and raised additional capital to answer doubts about its ability to continue as a company. It agreed with lenders and Dubai World to commit to funding CityCenter in a deal that company officials have said saved the project.
The Las Vegas-based company’s shares traded for $74.89 on Aug. 2, 2007, and hit a low of $1.89 on March 5, 2009, the period cited in the lawsuit.
Shares of MGM Mirage rose 21 cents, 2.5 percent, on Thursday to close at $8.65.