Floor & Decor Investor Accuses Ares Management of Insider Trades

A Floor & Decor Holdings Inc. investor filed a Delaware lawsuit claiming its private equity backers at Ares Management Corp. and Freeman Spogli Management Co. used misleading sales data to pump up its stock for a public offering, then sold $466 million worth before it tanked.

The partly redacted Chancery Court suit, made public Wednesday, also targets Floor & Decor’s board, which includes a majority of members with ties to the two firms.

It accuses them of using “generic” disclaimers about potential “wide price fluctuations” as misdirection—to give the impression they were making boilerplate securities disclosures—while actively concealing “known and ...