Neogen Class Action Lawsuit: A Comlete and Authoritative Investor Playbook on Investor Protection [2025]

Securities fraud class action lawsuits represent a significant legal mechanism for investors who have suffered financial losses due to corporate malfeasance. These lawsuits, such as the Neogen class action lawsuit, typically arise when a company or its executives engage in deceptive practices that mislead investors about the company’s financial health or prospect.

The goal of such litigation is to hold the perpetrators accountable and secure compensation for the affected investors. Securities fraud encompasses a range of activities, including insider trading, false financial statements, and misleading disclosures, all of which can severely impact market integrity and investor confidence.

In a class action context, a group of investors collectively brings the lawsuit against the defendant, which could be a corporation or its executives. This collective approach is particularly powerful in the securities realm because it allows individual investors, who might not have the resources to pursue litigation on their own, to band together and seek justice.

The class action mechanism ensures that the legal process is efficient and that the interests of all affected investors are represented.

The complexity of securities fraud class action lawsuits requires plaintiffs to navigate a labyrinth of legal standards and procedural hurdles. One of the most significant challenges is surviving a motion to dismiss, a legal maneuver by the defendants to have the case thrown out before it reaches trial.

Understanding the nuances of the Neogen lawsuit is crucial for any stakeholder involved, as it sets the stage for the strategic decisions that will follow. In the case of the Neogen class action lawsuit, these elements come into sharp focus, highlighting the importance of a well-crafted legal strategy.

Allegations in the Neogen Class Action Lawsuit

Neogen, together with its subsidiaries, engages in the development, manufacture, and marketing of various products and services dedicated to food and animal safety.  According to the complaint, in December 2021, it was announced that Neogen would merge with the Food Safety Division of the 3M Company, with the deal closing in September 2022.

The Neogen class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that:

1. defendants led investors to believe that Neogen’s integration with 3M was progressing much better than it actually was; and
2. even when Neogen was forced to reveal that certain “inefficiencies” arose as a result of the integration, defendants downplayed them and assured investors that they were fully aware and committed to resolving them quickly.

The Neogen class action lawsuit further alleges that on January 10, 2025, Neogen announced its preliminary second quarter of 2025 financial results, revealing, among other things, that:

• GAAP net income in the quarter was significantly negative due to a $461 million non-cash goodwill impairment charge related to the 3M acquisition;
• Neogen cut its fiscal year 2025 revenue and EBITDA guidance; and
• Neogen concluded that, as of November 30, 2024, Neogen had material weaknesses in its internal control over financial reporting.  On this news, the price of Neogen common stock fell more than 5%, according to the complaint.

Then, on April 9, 2025, the Neogen class action lawsuit alleges that Neogen announced its third quarter of 2025 financial results, reporting a loss of $11 million, or $0.05 per share, compared with a loss of $2 million, or $0.01 per share, a year earlier.  Neogen further announced that revenue fell 3.4% to $221 million which had been negatively impacted by integration issues.

Further, Neogen was cutting its fiscal year 2025 revenue and EBITDA outlook, capital expenditures were expected to be $100 million as a result of lowered adjusted EBITA and a “pull-forward of . . . integration capex into fiscal 2025,” and that CEO, defendant John Adent, would be stepping down.  On this news, the price of Neogen common stock fell 28%, according to the complaint.

Finally, on June 4, 2025, Neogen revealed that it expected “EBITDA margin to probably be around the high-teens” which represented a considerable drop from the previous quarter’s profit margin of 22%, blaming the expected shortfall on “elevated . . . inventory write-offs,”  according to the complaint.  The Neogen class action lawsuit alleges that on this news, the price of Neogen common stock fell more than 17%.

The Role of Institutional Investors

Institutional investors, such as pension funds and mutual funds, play a pivotal role in securities litigation. Their involvement not only reflects their financial stakes but also their capacity to influence the direction of legal proceedings.

Monitoring Corporate Behavior

These investors often act as watchdogs, ensuring that companies adhere to ethical and legal standards. When corporate management fails to meet these expectations, institutional investors can leverage their influence by filing proxy resolutions or engaging in litigation. This monitoring function is essential for safeguarding the interests of all shareholders.

Collective Action for Accountability

The participation of institutional investors in the Neogen class action lawsuit underscores the importance of collective action in holding corporations accountable. By banding together, investors can amplify their voices and enhance the likelihood of achieving favorable outcomes.

Legal Framework of Securities Litigation

Securities litigation serves as a critical mechanism for investor protection, allowing individuals to seek redress for losses incurred due to corporate misconduct. Understanding the legal framework surrounding these lawsuits is essential for potential claimants.

Key Legal Provisions

The Private Securities Litigation Reform Act of 1995 (PSLRA) establishes guidelines for securities class actions. This legislation aims to streamline the litigation process while ensuring that investors have a fair opportunity to pursue their claims.

Challenges in Securities Litigation

While securities class actions provide a pathway for recovery, they are not without challenges. Plaintiffs must navigate complex legal standards, including the need to demonstrate scienter, or intent to deceive. Additionally, potential limitations on recovery amounts through settlements can impact the overall effectiveness of these lawsuits.