Florida SBA Files Complaint Against Target for LGBT Pride Campaign

The Florida State Board of Administration, the fiduciary manager of the state’s pension and investment funds, filed a complaint against the Target Corp., accusing the retail giant of misleading and defrauding investors by not informing investors of the risks associated with customer backlash to a 2023 “Pride” campaign, as well as other environmental, social and governance and diversity, equity and inclusion initiatives.

The complaint, State Board of Administration of Florida v. Target Corp., filed February 20 in the United States District Court for the Middle District of Florida, argues that boycotts related to the company’s 2023 Pride campaign wiped $25 billion off of the company’s market capitalization over a six-month period, including $10 billion in a mere 10 days.

The Florida SBA manages a portfolio of $257 billion, including the state retirement system and a hurricane disaster fund.

The complaint, which seeks class action status and demands a trial by jury, aims to represent Target investors who owned the company’s shares during the period of March 9, 2022—the day after Target released its 2021 annual report—and August 16, 2023. SBA held 787,694 shares of Target on March 8, one day before the class period began, according to the SBA’s filing.

In Target’s 2022 annual report, released March 8, 2023, the company removed language that suggested that a position on or a lack of position on ESG and DEI matters could harm its reputation. The language was present in its 2021 report.

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Florida Attorney General James Uthmeier said in a statement that failing to disclose these risks was a violation of Sections 10(b) and 14(a) of the Securities Exchange Act of 1934.

The complaint hones in on the alleged deception.

“Target’s CEO Brian Cornell and its Board of Directors did not oversee or disclose the obvious risks of Target’s 2023 LGBT-Pride Campaign and the ESG/DEI initiatives which it advanced, but they told investors that they did,” the complaint states. “In doing so, they deceived Target investors as to the true nature of the risks of their investments and caused them to unknowingly support Target’s Board and management in their misuse of investor funds to serve its divisive political and social goals—and ultimately cost investors billions.”

Florida Chief Financial Officer Jimmy Patronis said in a statement that he feels the Target campaign was part of a trend.

“We’ve seen time and time again that when companies prioritize performative virtue signaling and wokeness over profitability, they alienate customers, lose market value, and erode shareholder trust—all while pretending their activism carries no financial risk,” Patronis said.

In January, Target announced that the company would step back from its ESG and DEI initiatives. Target was also sued by another Florida pension fund: in January, the City of Riviera Beach Police Pension Fund filed suit against the company for similar reasons.

“It’s unacceptable and Florida is fighting back on behalf of taxpayers and investors that have had enough,” Patronis said in the statement. “Businesses like Target need to focus on the bottom line and do right by their customers, not some ESG overlords. Thank you to Governor DeSantis and the SBA for leaning forward on this issue.”