Toll Brothers sued by shareholder

A shareholder has filed a lawsuit against Toll Brothers Inc., claiming the luxury homebuilder inflated its stock prices by misleading investors about the strength of the company's position in the housing market.

The suit states that while executives for the Horsham-based company were telling investors the luxury home market was “tremendous” and the company was on track to grow 20 percent in a year, demand for its homes was actually shrinking, and it didn't have enough inventory to achieve that promised growth.

“Nothing was more important to them than convincing the public marketplace that they were continuing to open new selling communities, maintaining high levels of traffic in Toll Brothers' existing communities, continuing home price appreciation to generate "inventory profits,' and continuing to grow at the 20 percent rate, because their jobs and millions of dollars in salaries, bonuses, stock option profits and other benefits depended on their doing so,” the lawsuit states.