Stock Update (NYSE:CLF): Cliffs Natural Resources Inc. to Settle Pending Class Action Lawsuit

Cliffs Natural Resources Inc. (NYSE:CLF) announced that the Company has reached agreements in principle to settle both the putative federal securities class action pending in the United States District Court for the Northern District of Ohio, and the combined shareholder derivative actions pending in the Court of Common Pleas ofCuyahoga County, Ohio.  The lawsuits were brought against the Company and/or a number of its former directors and officers in 2014 before the change of control which occurred coincident with the July 2014 annual shareholder meeting. These lawsuits were based, among other things, on the alleged dissemination of false or misleading information by the previous management and previous board of directors regarding the Company’s former Bloom Lake mine in Canada, the impact of those operations on the Company’s financial outlook, including the sustainability of the common stock dividend, and alleged failures to maintain internal controls and appropriately oversee and manage the development of the Bloom Lake mining operation.

The settlement agreements contain no admission of liability or wrongdoing and include a full release of all defendants in connection with the allegations made in the lawsuits. The settlements are subject to definitive documentation, shareholder notice, and court approval.

The settlement of these lawsuits will have no impact on the Company’s financial position or operations. The agreement in the securities action provides for a settlement payment to the class of $84,000,000, the totality of which will be paid by the Company’s third party insurance carriers.  Under the terms of the settlement for the derivative actions, the Company has agreed to adopt a number of changes to its corporate governance policies, protocols and practices.  In addition, the Company’s insurance carriers will pay $775,000 for plaintiff’s attorneys’ fees and costs, subject to court approval. (Original Source)

Shares of Cliffs Natural Resources closed last Friday at $1.84. CLF has a 1-year high of $7.28 and a 1-year low of $1.20. The stock’s 50-day moving average is $1.61 and its 200-day moving average is $2.55.

On the ratings front, Cliffs Natural has been the subject of a number of recent research reports. In a report issued on January 8, Macquarie analyst Aldo Mazzaferro downgraded CLF to Hold, with a price target of $1.60, which represents a potential downside of 13.0% from where the stock is currently trading. Separately, on December 28, FBR’s Lucas Pipes reiterated a Hold rating on the stock and has a price target of $1.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Aldo Mazzaferro and Lucas Pipes have a total average return of -33.1% and -27.4% respectively. Mazzaferro has a success rate of 6.7% and is ranked #3470 out of 3583 analysts, while Pipes has a success rate of 22.0% and is ranked #3543.

Cliffs Natural Resources Inc is a mining and natural resources company. The Company is a supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota.

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