Lululemon Athletica Inc. still hasn’t lived down last year’s yoga pants debacle, when customers discovered that the company’s pricey sportswear showed a lot more of their figures than they bargained for. But the see-through pants fiasco and similar missteps by Lululemon executives can’t serve as the basis for a securities fraud class action against the company, a judge in Manhattan confirmed on Friday.
The plaintiffs alleged that Lululemon duped shareholders by touting product quality as a key element of the company’s success, despite knowing that quality controls were sorely lacking. According to lawyers at Bernstein Litowitz Berger & Grossmann, Lululemon investors lost about $2 billion between September 2012 and January 2014 as the yoga pants episode and other mishaps hurt the company’s stock price.
