Shareholder sues home builder Toll Brothers

NEW YORK, April 18 (Reuters) - A shareholder has sued Toll Brothers Inc. (TOL.N), accusing the luxury home builder of misleading investors about the impact of the housing market downturn on its business.

The lawsuit, filed on Tuesday in U.S. District Court for the Eastern District of Pennsylvania, contends that Toll Brothers and its top officers made false and misleading statements that artificially inflated the company's share price.

A Toll Brothers spokesman, Fred Cooper, said on Wednesday that the company believes the complaint is "without merit."

The suit seeks class-action status on behalf of purchasers of Toll Brothers stock from Dec. 9, 2004, to Nov. 8, 2005.

During that period, according to the lawsuit, the company made false and misleading statements indicating that its business model "was unique and thus immune from the adverse impact of rising interest rates and other negative macro-economic factors that appeared to be negatively impacting the home building industry."

Driven by the company's statements about the strength of its business model, the stock jumped from below $25 a share in the fall of 2004 to $58.25 in July 2005 before falling sharply later in 2005, the lawsuit said. The share drop followed the disclosure of "company-specific adverse information that had previously been misrepresented to or withheld from the market," the suit contends.

Toll Brothers' shares were up 48 cents at $29.27 on Wednesday afternoon, a 1.7 percent gain.