A Florida police pension fund is suing the Target Corp. for allegedly hiding from investors the risks involved in promoting its social and environmental causes. The lawsuit, filed just days after Target dropped those policies, claims the company knew it risked being boycotted when it implemented its diversity, equity and inclusion, and environmental, social and governance initiatives, but failed to warn investors.
The plaintiffs’ filing argues the backlash caused by Target’s celebration of Pride Month in 2023 sent its stock plummeting. The stock also took a hit after the lawsuit was filed on January 31 and remained down 6% one week later.
The City of Riviera Beach Police Pension Fund, which filed the class action lawsuit in U.S. District Court for the Middle District of Florida, also named as defendants Target CEO Brian Cornell and a dozen current and former members of the company’s board of directors. The complaint claims the alleged lack of disclosure violated the Securities Exchange Act of 1934.
“This deceit, through misleading statements in the company’s public filings, including its 10-Ks and proxy statements, caused Target’s investors to purchase Target stock at artificially inflated prices and to unknowingly support Target’s Board and management in their misuse of investor funds to serve political and social goals,” the complaint states. “Specifically, the 2023 LGBT-Pride Campaign offended certain Target customers, provoking consumer backlash and boycotts that caused Target’s sales to fall for the first time in six years”
The complaint notes that Target’s stock fell sharply again in November 2024 after it “reported disappointing earnings and guidance, as it continued to grapple with lingering effects of its ill-advised DEI campaigns that turned away customers, and apparently some customers for good.”
The proposed class covers investors who bought Target stock between August 26, 2022, and November 19, 2024.
Target did not immediately respond to a request for comment.
The retail giant was previously sued for the same reason in 2023 by Target shareholder Brian Craig. Craig, who still owns stock in the company, bought approximately 216 shares of Target stock for $50,000 in April 2022. According to his complaint, the value of Craig’s shares had already plunged 30% to approximately $34,839 a little more than one year later and one month before the backlash started. The lawsuit states that after the backlash occurred, the value of his stock was down to $28,896.10.
That lawsuit is still working its way through the courts two and a half years later, indicating that the latest lawsuit is not likely to be litigated any time soon.
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Tags: City of Riviera Beach Police Pension Fund, DE&I, ESG, Lawsuits, Target
