Labaton Keller Sucharow LLP Files Securities Class Action Against CarMax, Inc. and Certain of Its Executives

Core Viewpoint - A securities class action lawsuit has been filed against CarMax, Inc. by the Indiana Public Retirement System, alleging that the company misled investors regarding its financial health and inventory management during a specified class period [1][2]. Group 1: Lawsuit Details - The lawsuit asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, covering all individuals and entities that purchased CarMax securities between June 20, 2025, and November 5, 2025 [1]. - The complaint expands upon a previous action by including additional allegations against CarMax's Executive Vice President Jon Daniels and claims regarding misleading information about loan-loss reserves and used car inventory value [2]. Group 2: Allegations Against CarMax - The action alleges that CarMax failed to disclose that its 2022 and 2023 vintage loans were underperforming and that its loss reserves were inadequate to cover these loans [5]. - It is claimed that CarMax had an oversupply of vehicles in early 2025, leading to significant depreciation of its inventory, and that mid-2025 sales were artificially boosted by customer concerns over potential new-car tariffs [5]. - The lawsuit contends that these factors resulted in the company materially overstating customer receivables, inventory values, and earnings, misleading investors about its business operations and growth prospects [5]. Group 3: Impact on Stock Price - Investors became aware of the alleged misconduct following two disclosures: the first on September 25, 2025, when CarMax reported disappointing sales and a $71 million increase in loss provisions, causing a stock price decline of over 20 percent [6]. - The second disclosure occurred on November 4, 2025, with the announcement of CEO William Nash's termination and warnings of further sales declines, leading to an additional stock price drop of more than 24 percent [6]. Group 4: Investor Participation - Investors who purchased CarMax securities during the class period may seek to be appointed as Lead Plaintiff, with motions required to be filed by January 2, 2026 [3][7]. - Class members do not need to seek Lead Plaintiff status to participate in any potential recovery from the lawsuit [7]. Group 5: Law Firm Representation - The Indiana Public Retirement System is represented by Labaton Keller Sucharow LLP, a firm known for its extensive experience in securities litigation and representing large pension funds with over $4.5 trillion in assets under management [9].