Target Defrauded Investors Over DEI Programs, FL Lawsuit Claims

FLORIDA — Retailing giant Target is being sued by the state of Florida over allegations the popular retailer "misled and defrauded investors" with its DEI initiatives and other mandates.

Newly appointed Florida Attorney General James Uthmeier claims the discount store chain “misled investors” by promoting diversity, equity and inclusion initiatives that prompted a backlash and hurt sales, ultimately costing shareholders.

Before it scaled back its DEI efforts last month, Target was long considered a corporate advocate for the rights of Black and LGBTQ+ people. The retailer's decision in 2023 to roll out LGBTQ+ merchandise in honor of Pride month outraged some shoppers and sparked confrontations in some stores.

In the lawsuit filed Thursday in Fort Myers, Uthmeier argued that Target violated the Securities Exchange Act by failing to disclose the known risks of its DEI and Pride month initiatives.

Florida's State Board of Administration, which Uthmeier represents, filed the class-action lawsuit and demanded a jury trial in the U.S. District Court Middle District of Florida. The 163-page lawsuit claims investors lost billions after its "disastrous" 2023 LGBT-Pride campaign prompted consumer boycotts.

“Corporations that push radical leftist ideology at the expense of financial returns jeopardize the retirement security of Florida’s first responders and teachers," Uthmeier said in a statement. “My office will stridently pursue corporate reform so that companies get back to the business of doing business — not offensive political theatre.”

Uthmeier, who was appointed as attorney general by Republican Gov. Ron DeSantis this week, has pledged to use the state's legal muster to “champion an America-first agenda” and challenge what he called “the left.”

Target did not respond to a request for comment from the Associated Press.

Target allegedly neglected to inform its investors of the financial risks associated with its LGBTQ activism, Uthmeier's office said in the release.

Additionally, Uthmeier accused the Minnesota-based retailer of violating two sections of the Securities Exchange Act of 1934 by not revealing the backlash risks for its DEI initiatives and environmental, social and governance mandates.

Target was accused of misleading investors by saying it would surveil the social and political risks from its DEI and ESG initiatives, and then solely monitoring its link to left-wing activist groups.

Other allegations against Target claim its Pride campaign forced a drop in the company's stock price, causing a loss of $25 billion in shareholder value in six months and a decline of $10 billion in market value in 10 days.

“Corporations that push radical leftist ideology at the expense of financial returns jeopardize the retirement security of Florida’s first responders and teachers," Uthmeier said in the release. "My office will stridently pursue corporate reform so that companies get back to the business of doing business — not offensive political theatre. We appreciate America First Legal’s assistance in the fight to keep Florida’s investments safe."

This is the second time America First Legal, overseen by senior members of the Trump administration and also a party in the lawsuit, is suing Target for securities fraud, according to a news release from Uthmeier's office.

The first lawsuit was filed in August 2023. Nearly a year later, Target was denied a motion to dismiss after a federal judge ruled the retailer possibly violated federal securities laws, Uthmeier's office said.

Washington, D.C.'s Boyden Gray PLLC and the Orlando-based firm Lawson Huck Gonzalez PLLC are representing American First Legal and Florida in the case.

Meanwhile, Target is facing more criticism after deciding to suspend its DEI efforts in January, particularly from the Black community.

Since then, DEI policies have been attacked by conservative activists and the White House, the Associated Press reported. Walmart and a host of other American brands have either minimized or gotten rid of their diversity measures, the Associated Press reported.

New Birth Missionary Baptist Church pastor Jamal Bryant, a megachurch in Georgia, is leading a boycott against Target for its DEI rollback, Axios Atlanta reported.

Includes reporting from the Associated Press.