Shareholder Felipe Peerally filed the suit against CEO Tarang Amin, CFO Mandy Fields, and nine current and former directors, alleging the company inflated revenue by up to $190 million between May 2023 and February 2025 while concealing weakening demand and rising inventory, according to the complaint filed as Peerally v. Amin, No. 3:26-cv-03167 (N.D. Cal.).
The complaint alleges executives attributed inventory buildups to strategic planning and strong consumer demand when the increases actually reflected slowing sales. The board allegedly failed to maintain adequate internal controls and allowed executives to portray inventory growth as evidence of business strength rather than channel stuffing, the suit claims.
The complaint points to a February 6, 2025 disclosure when E.L.F. lowered its revenue guidance and acknowledged "slower than expected new product performance" and "lower demand trends." The company's stock fell nearly 20% on that news, dropping from $88.49 to $71.13 per share, according to the suit.
The complaint also alleges insider trading, claiming directors and officers sold more than $140 million in stock while allegedly possessing material nonpublic information about deteriorating business conditions. Amin alone sold $107.4 million in shares during the relevant period, according to the filing.
Peerally alleges he served a litigation demand on the board in June 2025, but the board deferred consideration citing pending securities litigation. The complaint argues that deferral amounts to a constructive refusal that would permit the derivative suit to proceed without further demand.
The case is assigned to the Northern District of California. No defendants have yet appeared in the action.