The D&O Diary has continued to follow the growing number of securities lawsuits alleging that companies understated the impact of tariffs, sanctions, and other geopolitical developments on their business and financial results. A newly filed securities class action lawsuit arising out of the take-private acquisition of Skechers USA, Inc. presents an interesting twist on that increasingly familiar theme. Rather than alleging that the company downplayed tariff-related risks, the plaintiffs contend that Skechers overstated the anticipated impact of tariffs in order to support lower financial projections, justify a reduced valuation, and ultimately facilitate a take-private transaction at a price that allegedly undervalued the company.

The October 21, 2026, filing not only represents the latest round of litigation arising from Skechers’ $9.4 billion sale to 3G Capital, but also raises broader questions about the role geopolitical risks increasingly play in corporate valuations, fairness analyses, and strategic transactions. As discussed below, the case may have important implications for D&O underwriters evaluating companies whose valuations are significantly influenced by geopolitical risk, particularly in the context of M&A transactions and related securities litigation.

A copy of the securities lawsuit can be found here.

The Lawsuit

The Delaware Lawsuit

D&O Diary readers may recall that Skechers announced in May 2025 that it had agreed to be acquired by 3G Capital in a transaction valued at approximately $9.4 billion. The deal ultimately closed in September 2025 and was subsequently challenged in shareholder litigation filed in the Delaware Court of Chancery on March 16, 2026. The Delaware Chancery  Court complaint alleges that the Greenberg family’s control and influence over the company enabled it to steer the sale process and secure transaction terms that benefited insiders at the expense of unaffiliated shareholders. The court has since appointed lead plaintiffs and lead counsel, and the action remains pending.

The Securities Lawsuit

The October 2026 securities complaint was filed in the United States District Court for the Central District of California by SM Merger Arbitrage LP against Skechers U.S.A., Inc.; Skechers founder and CEO Robert Greenberg; Skechers President Michael Greenberg; private equity firm 3G Capital; and Skechers’ financial advisor, Greenhill & Co. LLC.

The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, alleging that the defendants made materially misleading statements and omissions concerning the impact of tariffs on Skechers’ business, the company’s financial projections, and the fairness of the $63-per-share merger consideration.

The plaintiffs contend that the tariff assumptions underlying the company’s revised projections were misleading because Skechers was allegedly better positioned than many of its competitors to navigate the tariff environment. According to the complaint, company executives privately acknowledged that Skechers’ value-oriented product offerings could actually benefit from changes in consumer purchasing behavior during a tariff-driven economic environment. In addition, the complaint alleges that Skechers possessed considerable flexibility to mitigate tariff exposure through sourcing adjustments and other operational measures.

According to the complaint, while investors were told that tariffs posed significant risks to profitability and future performance, management allegedly communicated a far more optimistic outlook internally during negotiations with 3G Capital. The plaintiffs contend that the resulting projections artificially reduced the company’s implied value and helped justify the eventual transaction price.

The complaint further alleges that members of the Greenberg family, including founder and CEO Robert Greenberg and President Michael Greenberg, received significant personal benefits through the transaction, including substantial liquidity and the ability to maintain an ownership interest and continuing influence in the post-transaction private company.

Discussion

As an initial matter, the newly filed federal securities action against Skechers is notable because it challenges the take-private transaction from a different angle than the previously filed Delaware shareholder litigation.

Rather than focusing principally on alleged controller conflicts, fiduciary duties, or sale-process concerns, the federal complaint places tariff-related assumptions and projections at the center of the alleged misconduct. Specifically, the plaintiffs contend that Skechers and the other defendants overstated the anticipated impact of tariffs in order to support lower financial projections, justify a reduced valuation, and ultimately facilitate the transaction at a price that allegedly undervalued the company.

By contrast, much of the recent tariff-related securities litigation has involved allegations that companies understated the impact of tariffs or failed to adequately disclose tariff-related risks to investors. Securities cases this year brought against companies such as Lakeland Industries and Pinterest, for example, have alleged that the defendants failed to fully inform investors about the adverse effects tariffs were having on business performance and financial results. Commentators have observed a growing wave of securities litigation tied to tariff-related disclosures and the volatility associated with changing trade policies.

The Skechers complaint flips the script. Rather than alleging inadequate disclosure of tariff-related risks, the plaintiffs contend that those risks were used to support reduced projections and a lower transaction valuation. The allegations remain unproven, and the defendants undoubtedly will challenge both their factual and legal sufficiency.

Nevertheless, the case raises an interesting question for D&O underwriters. As tariffs, sanctions, supply-chain disruptions, and other geopolitical considerations become increasingly important drivers of corporate valuation, could they also become a source of transaction-related securities litigation? If plaintiffs begin to scrutinize whether geopolitical risks were selectively incorporated into projections, fairness analyses, and valuation models in order to support lower deal prices, underwriters may face a new category of exposure arising not from the underlying geopolitical event itself, but from disputes over how its anticipated impact was reflected in a company’s valuation and strategic decision-making.

That possibility may be particularly relevant for companies operating in industries heavily affected by tariffs and international trade policy. Where management attributes reduced projections or lower valuations to geopolitical uncertainty, securities plaintiffs may increasingly seek discovery to determine whether internal analyses and forecasts reflected a materially different assessment of those risks.

From a D&O underwriting perspective, the case highlights another potentially important development. As of late, disclosure of geopolitical risk has become a significant source of corporate and securities litigation exposure. The Skechers lawsuit suggests that this exposure may now extend to M&A transactions, particularly where geopolitical assumptions play a meaningful role in shaping projections and valuations.