GM hit with investor lawsuit

General Motors was on the receiving end of a class action lawsuit filed on Monday claiming that it misled investors about its financial outlook. The suit alleges that the company misled investors in late February and early March, inflating its stock price and debt ratings before warning on March 16 that its 2005 earnings would be as much as 80 percent below its then current forecast.
On the day of the warning, GM's stock price fell 14 percent (see chart at right), paralleled by a similar decline in the price of its debt securities.

Defendants in the suit include chairman and CEO Rick Wagoner, chief financial officer John Devine, and General Motors Acceptance Corporation.