(LibertySociety.com) – Smith & Wesson was hit with a lawsuit on December 4 by a group of nuns who hold at least a thousand shares of the publicly traded company. The nuns filed the lawsuit in Nevada, claiming that the company is putting shareholders in a risky position with its AR-15 marketing tactics.
While the nuns do not hold a large stake in the company, they are allowed to weigh in on how it is governed. According to the Wall Street Journal, the group has used the same tactics with at least two other companies to influence decision-making. Shareholder lawsuits are extremely common, but no one has ever brought one against a publicly traded gunmaker.
National Shooting Sports Foundation’s senior vice president, Lawrence Keane balked at the lawsuit, stating that “this same group has been filing shareholder proposals and losing,” adding that the lawsuit was its latest method. Newman Ferrara lawyer Jeffrey Norton pointed out that this type of lawsuit has been successful for other industries. Joe Kavan, who has represented various gunmakers, said that the case will likely be one to watch. He added that the lawsuit may make its way through the courts “if they get an activist judge.” However, he believes that the group’s chances are slim because of its highly speculative arguments.
The lawsuit claims that the company has marketed the AR-15 to appeal to young people, especially younger males who play video games. The group has advocated for the company to change its marketing tactics so that fewer young men, youth, and people who are mentally disturbed will not be influenced to buy the weapon.
The AR-15 is owned by more than 20 million American civilians. In the last nine years, Smith & Wesson has made $695 million from AR-15 sales. Most of the proposals brought to the company by the nun group have never made it to board meetings. The group has also filed multiple resolutions, but they all ultimately failed.
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