Securities Regulation Daily Wrap Up, FRAUD AND MANIPULATION—N.D. Ill.: Laborers’ District Council files securities fraud class action v. James Hardie Industries, (Oct 28, 2025)

By Suzanne Cosgrove

The complaint alleges that investors were left unaware that sales in James Hardie’s largest business segment experienced inventory loading by channel partners.

The Laborers’ District Council last week brought a securities fraud class action on behalf of all those who purchased or acquired James Hardie common stock (previously American Depositary Shares until converting to common stock on July 1, 2025) in the period between May 20, 2025, through August 18, 2025, inclusive, and who were damaged by the stock’s decline (Laborers’ District Council v. James Hardie Industries PLC, No. 1:25-cv-13018 (N.D. Ill. Oct. 24, 2024)).

Parties. The defendant, James Hardie Industries PLC, provides exterior home and outdoor living solutions, with a portfolio that includes fiber cement, fiber gypsum, and composite and PVC decking and railing products. The company’s U.S. headquarters is in Chicago, and its stock trades on the NYSE under the ticker symbol JHX.

The complaint was filed by Laborers’ District Council and Contractors’ Pension Fund of Ohio, individually and on behalf of all others similarly situated.

The complaint alleges James Hardies Industries violated several federal securities laws: Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. §§ 78j(b) and 78t(a) and Rule 10b-5 promulgated thereunder by the SEC, 17 C.F.R. § 240.10 b-5.

Jurisdiction. Filed in the Northern District Court of Illinois, the court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §1331 and 1367, and pursuant to §27 of the Exchange Act, 15 U.S.C. §78aa. The company’s U.S. corporate headquarters is located in the district and it conducts substantial business in its area.

James Hardie markets itself as the No. 1 producer of high-performance fiber cement building solutions in the U.S. The company’s business segments include North America Fiber Cement, Asia Pacific Fiber Cement, and Europe Building Products. North America Fiber Cement generates about 80 percent of the company’s earnings.

Facts. According to the filing, defendants made false or misleading statements and failed to disclose material facts. Investors were unaware that sales in James Hardie’s largest business segment were experiencing inventory loading by channel partners, the filing states, and had the hallmarks of fraudulent channel stuffing.

On August 19, 2025, James Hardie shocked investors by belatedly disclosing that sales in North America Fiber Cement declined by 12 percent due to the customer destocking first discovered by the defendants in April through May. Aaron Erter, the company’s CEO and executive director, explained that the results reflect a “normalization of channel inventories” that was expected to impact sales for at least the next two quarters.

On the news, the price of James Hardie’s common stock dropped by more than 34 percent, or $9.79 per share, from a closing price of $28.43 per share on August 18, 2025, to $18.64 per share on August 20, 2025. As a result of defendants’ acts and omissions, and the precipitous decline in the market value of the company’s common stock, plaintiff and other class members suffered significant losses and damages.

Claims. The filing states defendants made false or misleading statements and failed to disclose material facts. Despite starting to see North America Fiber Cement customers destocking inventory in April and early May 2025, the defendants made numerous statements on May 20 and 21, 2025, falsely assuring investors that the segment remained strong despite the challenging market environment and expressly denying that inventory destocking was occurring.

Relief requested. The plaintiff seeks as jury trial as well as the following:

• Determination that the action filed is a proper class action pursuant to Rule 23(a) and 23(b)(3) of the Federal Rules of Civil Procedure on behalf of the class, and a certification of the plaintiff as class representative pursuant to Rule 23 of the Federal Rules of Civil Procedure and appointment of plaintiff’s counsel as lead counsel;

• Compensatory and punitive damages in favor of the plaintiff and the other class members against all defendants, jointly and severally, for all damages sustained as a result of defendants’ wrongdoing, in an amount to be proven at trial, including pre-judgment and post-judgment interest; the awarding to the plaintiff and other members of the class their reasonable costs and expenses in this litigation, including attorneys’ fees, experts’ fees and other reasonable costs and disbursements; and other such relief as the court may deem just and proper.

Attorneys: Katrina Carroll (Carroll Shamberg LLC) for Laborers' District Council and Contractors' Pension Fund of Ohio.

Companies: Laborers' District Council and Contractors' Pension Fund of Ohio; James Hardie Industries, PLC

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