Abraham, Fruchter & Twersky, LLP Announces
Investigation of American Apparel, Inc.
August 10, 2010 01:52 PM Eastern Daylight Time
NEW YORK--(EON: Enhanced Online News)--Abraham, Fruchter & Twersky, LLP has commenced an
investigation concerning possible violations of state and federal securities laws by American Apparel, Inc.
(“American Apparel” or the “Company”) (AMEX: APP) related to the Company’s December 31, 2009 financial
On March 31, 2010, the Company publicly disclosed an audit report issued by Deloitte & Touche, LLP (“Deloitte”)
which identified material weaknesses in American Apparel’s internal controls over financial reporting and their
financial closing and reporting processes. These weaknesses led to deficiencies in the analyzing and recording of
certain inventory costs, cost of sales, and the preparation of account analyses, account summaries and account
reconciliations. The Company also did not perform adequate and independent reviews and maintain effective
controls over the preparation of its financial statements. As a result, there is an increased likelihood of “potential
material errors to the [December 31, 2009] consolidated financial statements.” The Company admitted their material
weaknesses as of December 31, 2009 represent continuing material weaknesses identified as of December 31,
2008. On July 22, 2010, Deloitte resigned as the independent registered public accounting firm of American
Apparel, having served the Company in that capacity since April 3, 2009. On July 29, 2010, after Deloitte’s
resignation was announced to the public, American Apparel shares promptly dropped from $1.81 per share to close
at $1.55 per share, on abnormally high trading volume.
If you purchased the common stock of American Apparel, Inc. between January 1, 2008 through July 29, 2010 and
would like to discuss this action, or if you have any questions concerning this notice or your rights as a potential class
member, you may contact: Jack G. Fruchter or Arthur J. Chen o