July 29, 2026  ·  Complaint filed July 28, 2026  ·  United States District Court for the Northern District of Illinois, Eastern Division, No. 1:26-cv-07596

Newman News, By David Brunk

Read the complaint

Anderson v. Yeager Tests Whether Hub Group’s Board Ignored $77M Accounting Error

A shareholder has filed a derivative suit alleging the logistics company’s directors and officers breached their fiduciary duties by failing to oversee financial reporting, leading to a $77 million understatement of purchased transportation costs and accounts payable that triggered an 18% stock drop when disclosed in February 2026.

Financial Performance and Misleading Statements

The complaint alleges that Hub Group’s leadership made materially false and misleading statements in SEC filings and earnings calls from 2023 through Q3 2025, while certifying the accuracy of financial statements that later required restatement. Plaintiff John Anderson, a Hub Group shareholder, brings the derivative action on behalf of the company against 14 individual defendants, including CEO Phillip D. Yeager, former CFO Kevin W. Beth, and Audit Committee Chair Gary Yablon, as well as the company itself as a nominal defendant.

Hub Group reported $1.2 billion in revenue for Q1 2023 (Compl. ¶33) and $1 billion in revenue for both Q2 and Q3 2023 (Compl. ¶36, ¶39). During a Q2 2023 earnings call, Defendants DeMartino and Phillip Yeager stated that the company had achieved a 6% operating income margin (Compl. ¶36). The company’s full year 2023 revenue was $4.2 billion, with a GAAP operating income margin of 5.1%, while Q4 2023 revenue was also reported at $1 billion with an operating revenue of $985 million and operating income of $29.4 million, representing a 3% GAAP operating income margin (Compl. ¶43). The complaint alleges that Defendant Yeager stated during a Q4 2023 earnings call that the company’s strategic priorities focused on long-term growth and cost management for Q4 2023 (Compl. ¶42). Despite these figures, the complaint alleges that the company’s financial statements during this period were materially misleading.

The allegations center on a $77 million understatement of purchased transportation costs and accounts payable disclosed on February 5, 2026, which the plaintiff claims resulted from systemic failures in Hub Group’s internal controls over financial reporting. The disclosure caused Hub Group’s stock price to fall approximately 18%, from $51.33 to $41.96 per share. A subsequent disclosure on May 11, 2026, that Hub Group’s 2023 and 2024 annual reports contained material misstatements led to an additional 13% decline, from $41.86 to $36.62 per share. The complaint alleges that the company expects to conclude it did not maintain effective disclosure controls and internal control over financial reporting for the years ended December 31, 2024 and 2023 (Compl. ¶80).

During a Q1 2024 earnings call, Defendant Yeager stated that the company’s operating income margin had improved to 3.7% due to yield management and cost containment (Compl. ¶46). Hub Group reported $1 billion in revenue for Q1 2024, with purchased transportation and warehousing costs totaling $740 million (Compl. ¶62). In a Q2 2025 earnings call, Defendant Beth stated that purchased transportation costs had decreased by $71 million due to strong cost controls and lower rail and warehouse expenses, while the company reported Q2 2024 revenue of $986 million and Q3 2024 revenue of $987 million (Compl. ¶53, ¶65). The complaint notes that Hub Group’s Q2 2024 purchased transportation and warehousing expenses were $727 million, a figure that would later be cited in comparisons to Q2 2025 costs. Defendant Yeager also stated that the company’s strategic priorities position Hub Group for long-term growth in 2025 (Compl. ¶56).

Hub Group’s full year 2024 revenue was reported at $4 billion, with operating revenue of $3.95 billion and operating income of $140.3 million (Compl. ¶57). The company also reported Q4 2024 operating revenue of $973 million and Q4 2024 operating income of $31.5 million, alongside Q4 2024 revenue of $1 billion (Compl. ¶57). The complaint alleges that these figures were misleading due to the accounting errors that later required restatement, including the $77 million understatement of purchased transportation costs and accounts payable.

The complaint further details that Hub Group’s purchased transportation and warehousing costs decreased 10% to $656 million in Q2 2025 from $727 million in Q2 2024, attributing the decline to rail cost decreases and lower third-party drayage, warehousing, and fuel costs (Compl. ¶66). For Q1 2025, the company reported purchased transportation and warehousing costs of $658 million, reflecting an 11% decrease from the $740 million reported in Q1 2024 (Compl. ¶62). The complaint alleges that these decreases were highlighted as improvements in cost management, with Defendant Beth stating that the company had achieved a 220-basis point improvement in purchased transportation costs as a percentage of revenue in Q1 2025. However, the complaint alleges that these statements were misleading in light of the later restatements, which revealed systemic accounting errors.

Audit Committee Oversight Failures

The complaint alleges that the Hub Group Board of Directors failed to exercise proper oversight of the company’s financial reporting and internal controls. The Audit Committee, chaired by Defendant Gary Yablon and including Defendants Mary H. Boosalis, Lisa Dykstra, Michael E. Flannery, James C. Kenny, Peter B. McNitt, Jenell R. Ross, and Martin P. Slark, was responsible for overseeing Hub Group’s financial reporting system and internal controls. The complaint alleges that the Audit Committee violated its charter, constituting a breach of fiduciary duty by Yablon, Boosalis, Dykstra, Flannery, Kenny, McNitt, Ross, and Slark (Compl. ¶97). Additionally, all Director Defendants are accused of breaching their fiduciary duties by making or allowing false and misleading statements (Compl. ¶98). The complaint further alleges that specific Director Defendants, including Phillip D. Yeager, David P. Yeager, Gary Yablon, and Peter B. McNitt, breached their fiduciary duties by failing to oversee internal controls (Compl. ¶110, ¶117, ¶123, ¶130).

The complaint states that the Board of Directors, as a whole and at the committee level, is ultimately responsible for overseeing risk management at the Company, quoting the document: "The Board of Directors, as a whole and at the committee level, is ultimately responsible for overseeing risk management at the Company" (Compl. ¶88). The complaint further alleges that "the Director Defendants were utterly failing in their oversight duties by allowing the Company to operate with inadequate internal controls" (Compl. ¶90). The complaint also notes that the Audit Committee was tasked with overseeing the financial reporting system and internal controls (Compl. ¶96).

The complaint alleges that Defendant Yablon, as Audit Committee Chair, knowingly or recklessly allowed the materially false and misleading statements contained in Hub Group’s Forms 10-K and 10-Q for 2023 through Q3 2025. The complaint states, "Defendant Yablon ... knowingly or recklessly allowing the materially false and misleading statements" (Compl. ¶126). It further alleges, "Defendant Yablon knowingly or recklessly allowed the Company to incorrectly recognize certain transactions, and to understate certain costs and accounts payable" (Compl. ¶127). The complaint also highlights that Yablon signed Forms 10-K for 2023 and 2024 and approved Forms 10-Q for Q1 through Q3 2025 (Compl. ¶125, ¶126).

Defendant McNitt signed Forms 10-K for 2023 and 2024 that contained false and misleading statements concerning the adequacy of the company’s internal controls over financial reporting (Compl. ¶132). The complaint states that McNitt "knowingly or recklessly allowing the materially false and misleading statements" (Compl. ¶133) and allowed the company to "incorrectly recognize certain transactions, and to understate certain costs and accounts payable" (Compl. ¶134). The complaint alleges that McNitt breached his duty of loyalty and good faith by failing to oversee the company’s internal controls and financial reporting (Compl. ¶135). Similar allegations are made against other Audit Committee members, including Flannery, Boosalis, Dykstra, Kenny, Ross, and Slark, each of whom is accused of failing to detect or prevent the accounting errors and breaching their duties of loyalty and good faith (Compl. ¶142, ¶149, ¶156, ¶163, ¶163, ¶176).

The complaint also highlights the role of the Audit Committee in reviewing and approving financial statements. For example, the Audit Committee, including McNitt, reviewed and approved the Forms 10-K and 10-Q filed during the relevant time period (Compl. ¶133). The complaint alleges that the Director Defendants’ conduct involved a knowing or reckless violation of their obligations, stating, "The conduct of the Director Defendants involves a knowing or reckless violation of their obligations as directors and officers of Hub Group" (Compl. ¶92). The complaint further alleges that the Director Defendants failed to ensure the Company complied with its legal obligations, disseminated truthful statements, maintained adequate internal controls, and operated in a diligent and prudent manner (Compl. ¶94).

Proxy Statement Misrepresentations

The complaint also alleges that Hub Group’s 2024 and 2025 proxy statements contained materially false and misleading statements about the Board’s oversight of risk management and internal controls. The allegations claim that the proxies misrepresented the Board’s risk oversight and failed to disclose the company’s inadequate internal controls, leading shareholders to vote to reelect the Director Defendants based on an uninformed vote. The complaint states, "The False Proxies... misrepresented and failed to disclose the Board’s risk oversight and the Company’s inadequate internal controls" (Compl. ¶215). The complaint notes that the Board of Directors views the integrity of the Company’s financial statements as a key pillar of its ongoing success, quoting the document: "The Hub Group Board of Directors views the integrity of the Company’s financial statements as a key pillar of our ongoing success" (Compl. ¶83). However, the complaint alleges that the Director Defendants failed to ensure the Company complied with its legal obligations, disseminated truthful statements, maintained adequate internal controls, and operated in a diligent and prudent manner (Compl. ¶94).

The complaint brings a claim under Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9, stating that it is based solely on negligence. The complaint disclaims any allegation of fraud, scienter, or recklessness for this claim, noting, "The section 14(a) Exchange Act claims alleged herein are based solely on negligence" and "Plaintiff specifically disclaims any allegation of, reliance upon any allegation of, or reference to any allegation of fraud, scienter, or recklessness" (Compl. ¶213). The complaint further alleges that the Director Defendants negligently issued materially misleading written statements in the proxy materials, stating, "The Director Defendants negligently issued, caused to be issued, and participated in the issuance of materially misleading written statements" (Compl. ¶214). The complaint alleges that the False Proxies solicited stockholder votes to reelect the Director Defendants to the Board, despite the alleged misrepresentations and omissions (Compl. ¶214).

The complaint alleges that the Director Defendants caused the Company to issue false and misleading proxy statements in 2024 and 2025, which the complaint describes as based solely on negligence, not recklessness or knowing conduct (Compl. ¶86, ¶87). The complaint states that stockholders voted to reelect the Director Defendants based on an uninformed vote, as the proxies did not disclose the alleged deficiencies in internal controls and risk oversight (Compl. ¶91).

Operating Expenses and Cost Management

The complaint details Hub Group’s operating expenses and purchased transportation costs during the relevant period. For Q1 2025, the company reported operating expenses of $877.9 million, with purchased transportation and warehousing costs totaling $657.9 million (Compl. ¶62). These costs represented 71.9% of revenue for Q1 2025, compared to 74.1% in Q1 2024, reflecting an 11% decrease in purchased transportation and warehousing costs (Compl. ¶62). The complaint alleges that these figures were misleading due to the understatement of costs and accounts payable, which later required a $77 million restatement.

For Q2 2025, Hub Group reported operating expenses of $871.3 million, with purchased transportation and warehousing expenses of $655.9 million. These costs represented 72.4% of revenue, compared to 73.7% in Q2 2024, reflecting a 10% decrease in costs from the $727 million reported in Q2 2024 (Compl. ¶66). The complaint attributes this decrease to rail cost decreases and lower third-party drayage, warehousing, and fuel costs. For Q3 2025, the company reported operating expenses of $895.1 million, with purchased transportation and warehousing expenses of $683.7 million, reflecting an 8% decrease from Q3 2024. The complaint alleges that these reported decreases were misleading, as they did not account for the later restatements.

The complaint also notes that purchased transportation and warehousing costs as a percentage of revenue ranged from 74% to 76% during 2022–2024 (Compl. ¶32). The improvements in these costs were highlighted in earnings calls, with Defendant Beth stating in Q2 2025 that purchased transportation costs had decreased by $71 million due to strong cost controls and lower rail and warehouse expenses (Compl. ¶65). The complaint alleges that these statements were misleading in light of the later restatements, which revealed that the company had not maintained effective disclosure controls and internal control over financial reporting for the years ended December 31, 2023 and 2024 (Compl. ¶80).

Internal Controls and Disclosure Failures

The complaint alleges that Hub Group’s internal controls over financial reporting were inadequate during the relevant period. The company’s Forms 10-Q for Q3 2023 and Q1 2025 stated that disclosure controls and procedures were effective as of September 30, 2023, and March 31, 2025, respectively (Compl. ¶40, ¶63). However, the complaint alleges that these certifications were false and misleading. Defendants Yeager and DeMartino certified the effectiveness of disclosure controls and procedures in the Q3 2023 Form 10-Q, asserting that the financial statements fairly presented the company’s condition (Compl. ¶41). Similarly, Defendants Yeager and Beth certified the Q1 2025 Form 10-Q, asserting responsibility for disclosure controls and the fair presentation of the financial statements (Compl. ¶64). The complaint alleges that these certifications were made despite the company’s later admission that it did not maintain effective disclosure controls and internal control over financial reporting for the years ended December 31, 2023 and 2024 (Compl. ¶80).

The complaint further alleges that Hub Group was unable to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as a result of the delay in filing its Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The document states, "Hub Group, Inc. (the 'Company') is unable to file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026... as a result of the delay in the filing of its Annual Report on Form 10-K for the fiscal year ended December 31, 2025" (Compl. ¶81). The company also disclosed that it expects to conclude it did not maintain effective disclosure controls and internal control over financial reporting for the years ended December 31, 2024 and 2023 (Compl. ¶80). The company was further notified by Nasdaq of non-compliance with Listing Rule 5250(c)(1) for the delayed 2025 Form 10-K.

The company’s Form 10-K for 2023 described its revenue recognition policies under ASC 606, which the complaint alleges were not properly followed, leading to the material misstatements (Compl. ¶44). The complaint also notes that the company’s CEO and CFO certified effective disclosure controls and procedures as of June 30, 2025, despite the later restatements (Compl. ¶67).

Breach of Fiduciary Duty and Unjust Enrichment

The complaint asserts six counts against the Director and Officer Defendants: breach of fiduciary duty, gross mismanagement, waste of corporate assets, unjust enrichment, violation of Section 14(a) of the Exchange Act, and breach of fiduciary duty for false and misleading statements. The complaint alleges that the Director Defendants breached their fiduciary duties of loyalty, good faith, and candor by failing to oversee the company’s financial reporting and internal controls (Compl. ¶92).

The waste of corporate assets claim alleges that the defendants wasted corporate assets by, among other things, incurring legal costs and liabilities due to their alleged misconduct. The complaint alleges that Defendant Phillip D. Yeager received compensation of $3,964,450 in 2024 and $2,609,274 in 2023, while Defendant David P. Yeager received $3,009,649 in 2024 and $2,665,638 in 2023 (Compl. ¶108, ¶115). The complaint also notes that Director Defendants, including Gary Yablon, received annual compensation of $300,089 as detailed in the 2025 Proxy (Compl. ¶124). Similar compensation figures are cited for other Director Defendants, including Boosalis, Dykstra, Flannery, Kenny, McNitt, Ross, and Slark (Compl. ¶131, ¶138, ¶145, ¶152, ¶159, ¶166, ¶173). The complaint states, "wasted corporate assets by, inter alia: (i) paying excessive compensation and bonuses to certain of its executive officers" (Compl. ¶204).

The unjust enrichment claim alleges that the defendants were unjustly enriched at Hub Group’s expense through their receipt of compensation tied to the company’s performance. The complaint seeks damages, restitution, disgorgement of profits and benefits, and other equitable relief for Hub Group. The complaint alleges that the defendants’ conduct caused the company to incur potentially millions of dollars in legal liability and costs (Compl. ¶204).

The complaint alleges that demand on the Board to bring this action would have been futile, as the Director Defendants face a substantial likelihood of personal liability for their alleged breaches of fiduciary duty. The complaint states, "substantial likelihood that Plaintiff will be able to prove that these individuals breached their fiduciary duties" (Compl. ¶178). It further alleges that the Director Defendants "failed to maintain an adequate system of oversight, disclosure controls and procedures, and internal controls" (Compl. ¶182). The complaint also alleges that the Director Defendants acted knowingly or recklessly to artificially inflate the Company’s securities price (Compl. ¶185). The Officer Defendants are similarly accused of breaching their fiduciary duties by making false and misleading statements in SEC filings and earnings calls from 2023 through Q3 2025 (Compl. ¶191).

The complaint alleges that the Director Defendants’ conduct caused harm to Hub Group, including the costs of defending the Securities Class Action and remediating internal control deficiencies (Compl. ¶84). The complaint seeks to redress the injuries inflicted upon Hub Group due to the Director Defendants’ breaches of fiduciary duty (Compl. ¶100). The complaint states that the Director Defendants caused the Company to issue materially false and misleading statements concerning the adequacy of the Company’s internal controls over financial reporting (Compl. ¶161).

The allegations in the complaint are unproven, and no defendant has yet responded to the claims.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.