Thursday, January 22, 2026
Hasbro's Chris Cocks PHOTO: Company promotional
A group of shareholders of Hasbro stock has filed a federal lawsuit against CEO Chris Cocks and company executives for what they claim are “breaches of their fiduciary duties as directors and/or officers of Hasbro, unjust enrichment, waste of corporate assets, gross mismanagement, abuse of control” - and violations of the Securities Exchange Act.
In the 76-page complaint filed in the U.S District Court of Rhode Island on Wednesday, plaintiffs Joseph Crocono and Ultan McGlone, who say they have been Hasbro shareholders who have held common stock since 2020 and 2021, respectively, claim that the company’s public statements were “materially false and misleading” on shareholder calls between 2021 and 2023.
The company is in the midst of relocating its headquarters from Rhode Island to Boston after more than 100 years.
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The lawsuit specifically concerns Hasbro’s “Magic: The Gathering” brand, which the plaintiffs argue is its “most important line of products.”
“Magic is a popular card game which notably features rare cards highly sought after by collectors,” according to the lawsuit. “Such cards may fetch upwards of thousands of dollars on the secondary market.”
“Given the nature of Magic’s secondary market, the rate at which new Magic card sets are printed and sold directly impacts the value of existing Magic cards to collectors. As such, the overprinting of new Magic sets would reduce the value of existing Magic sets. Although analysts and investors consistently inquired as to whether the Company was in fact overprinting Magic sets, the Individual Defendants repeatedly denied such speculation,” the lawsuit maintains.
The lawsuit says that a damning report by Bank of America in 2022, however, found that Hasbro was “overproducing Magic cards, which have propped up Hasbro’s recent results but are destroying the long-term value of the brand.”
The lawsuit contends that statements and actions made by the Hasbro defendants “caused the Company substantial harm by causing it to repurchase its own shares at artificially inflated prices.”
“In total, the Company spent an aggregate amount of approximately $125 million to repurchase approximately 1.4 million shares of its own common stock at artificially inflated prices from April 2022 to July 2022,” according to the plaintiffs, who are being represented by Sarah Maneval and Saadia Hashmi of The Brown Law Firm in New York City. Affiliated local counsel is Higgins, Cavanagh, and Cooney.
“In total, this caused the Company to overpay for repurchases of its own stock by approximately $55.9 million," the lawsuit maintains.
Hasbro did not respond to a request for comment at the time of publication.
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Allegations of Fraud
The suit claims the defendants committed fraud.
“In light of the breaches of fiduciary duty engaged in by the Individual Defendants, the majority of whom are the Company’s current directors, of the collective engagement in fraud and misconduct by the Company’s directors, of the substantial likelihood of the directors’ liability in this derivative action and Defendants Cocks and Williams’ liability in the Securities Class Action, their being beholden to each other, their longstanding business and personal relationships with each other, and of their not being disinterested or independent directors, a majority of the Board cannot consider a demand to commence litigation against themselves and the other Individual defendants on behalf of the Company with the requisite level of disinterestedness and independence,” states the lawsuit.
According to the complaint, the claims come from “a review of internal corporate documents produced by Defendants to Plaintiffs’ counsel, a review of the Defendants’ public documents, conference calls and announcements made by Defendants” and their shareholder derivative action “seeks to remedy wrongdoing committed by Hasbro’s current and/or former directors and officers from September 16, 2021 through October 26, 2023.”
The lawsuit contends that the “Individual Defendants claimed that the Company printed Magic sets according to its ‘segmentation’ strategy.’”
“According to the Company’s segmentation strategy, new Magic sets were to be printed to meet demand from new consumer segments,” the lawsuit states.
The lawsuit says that the “truth began to emerge on November 14, 2022, when Bank of America (‘BofA’) issued a report that the Company had been ‘overprinting’ Magic sets and risked damaging the value of the Magic brand.”
It goes on to note that the price of Hasbro’s stock then fell 9.9% following the release of the report.
“The truth continued to emerge on January 26, 2023, when the Company issued a press release to announce its financial results for the fourth quarter and full year of 2022. The Q4 2022 Press Release reported that the Wizards of the Coast & Digital Gaming (‘Wizards’) segment had fallen significantly short of the Company’s guidance for year over-year fourth quarter revenue growth. The Q4 2022 Press Release further noted that the Company would “eliminat[e]…approximately 15% of its global workforce” in the coming year, and that its COO would be departing from their position,” the lawsuit continues.
The lawsuit notes that following this development, the stock price dropped 8.1%.
It continues:
“The truth finally emerged on October 26, 2023, before the market opened, when Hasbro issued a press release to announce its disappointing financial results for the third quarter of 2023. The Q3 2023 Press Release reported that the Company had '[r]educed owned inventory [by] 27%[,]' but further noted that Consumer Products inventories has decreased by 34%. During an earnings call held that same day, the Individual Defendants stated that the ‘[reduction in] total owned inventory’ was ‘primarily driven by [the] reduction in [non-Wizards] inventory[.]”
It was during this time period that the lawsuit contends that “in breach of their fiduciary duties owed to Hasbro, willfully or recklessly made and/or caused the Company to make false and misleading statements.”
“Specifically, the Individual Defendants willfully or recklessly made and/or caused the Company to make false and misleading statements that failed to disclose, inter alia, that: Hasbro’s strategy with regard to printing Magic cards was not as carefully thought out as portrayed; the Company was in fact printing a volume of Magic sets which exceeded consumer demand; the Company’s inventory allocation management was problematic, particularly as it pertained to the Company’s printing strategy for Magic sets; the Company was overloading the market with Magic sets to generate revenue and to offset shortfalls within the Company; as a result of the Company’s overprinting of Magic sets, existing Magic cards were devalued; and the Company failed to maintain internal controls,” states the lawsuit.
“As a result of the foregoing, the Company’s public statements were materially false and misleading at all relevant times,” says the lawsuit. “The Individual Defendants failed to correct and/or caused the Company to fail to correct these false and misleading statements and omissions of material fact, rendering them personally liable to the Company for breaching their fiduciary duties.”
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Breach of Fiduciary Claim - And More
The lawsuit contends that Hasbro “has been substantially damaged as a result of the Individual Defendants’ knowing or highly reckless breaches of fiduciary duty and other misconduct.
“Additionally, the Individual Defendants caused the Company substantial harm by causing it to repurchase its own shares at artificially inflated prices. In total, the Company spent an aggregate amount of approximately $125 million to repurchase approximately 1.4 million shares of its own common stock at artificially inflated prices from April 2022 to July 2022. In total, this caused the Company to overpay for repurchases of its own stock by approximately $55.9 million,” the lawsuit alleges.
The lawsuit alleges that Hasbro “utilized the revenue of Magic to account for revenue shortfalls elsewhere in the company.”
“In order to account for shortfalls in other elements of the Company’s businesses, new Magic sets would thus be “parachuted in” to provide additional revenue. As such, the explosive growth in the Magic business noted just prior to and during the Relevant Period was in fact the result of the Parachute Strategy,” says the lawsuit.
The lawsuit goes on to focus on the November 14, 2022, BoA report, which they said revealed a “primary concern” that “Hasbro has been overproducing Magic cards, which has propped up Hasbro’s recent results but is destroying the long-term value of the brand.”
“The BofA Report observed that ‘Magic sales nearly doubled over the course of the pandemic’ and that ‘Hasbro has kept the growth going with more frequent set releases, more product in each set and wider distribution.’ The BofA report further stated that the ‘increased supply’ of Magic had ‘caused distributors, collectors and local game stores to lose money on Magic,’” according to the lawsuit.
The lawsuit says, “As a result of Magic consumers’ 'growing frustration' with the ballooning number of Magic sets, the BofA report concluded, ‘We expect they’ll order less product in future releases.'"
“Throughout the Relevant Period, the Individual Defendants had access to internal metrics regarding the Company’s overprinting of Magic cards. The Individual Defendants’ knowledge as to the materially false and misleading nature of the statements they made is evident through the accounts of several former employees of the Company,” according to the lawsuit. “As a direct and proximate result of the Individual Defendants’ conduct, Hasbro has lost and expended, and will continue to lose and expend, many millions of dollars.”
Regarding Cocks, the lawsuit specifically says, “As the Company’s highest officer, he conducted little, if any, oversight of the Company’s engagement in the scheme to make false and misleading statements, consciously disregarded his duties to monitor such controls over reporting and engagement in the scheme, and consciously disregarded her duties to protect corporate assets.”
The suit against Hasbro seven claims including: Against the Individual Defendants for Violations of Section 20(a) of the Securities Exchange Act; Against the Individual Defendants for Violations of Section 10(b) and Rule 10b-5 of the Exchange Act; Against the Individual Defendants for Breach of Fiduciary Duties; Against Individual Defendants for Unjust Enrichment; Against Individual Defendants for Waste of Corporate Assets; Against Individual Defendants for Gross Mismanagement; and Against Individual Defendants for Abuse of Control.”
Cocks and Williams are facing an additional charge for “Contribution Under Sections 10(b) and 21D of the Exchange Act.”
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