Shareholder sues Caterpillar

NEW YORK: Caterpillar Inc was sued on Friday for allegedly deceiving shareholders about its business, one day after federal law enforcers raided three of its buildings in connection with a probe into the heavy machinery manufacturer's offshore tax practices.

In a complaint filed in Chicago federal court, Jacob Newman accused Caterpillar of defrauding him and other shareholders in regulatory filings by touting its commitment to good ethics, while concealing how it "unlawfully used foreign subsidiaries" to avoid paying billions of dollars of U.S. taxes.

Caterpillar did not immediately respond to requests for comment after business hours.

Shares of Caterpillar fell 4.3 percent on Thursday, wiping out more than $2.4 billion of the Peoria, Illinois-based company's market value.

The company said it believed the raid by officials from agencies including the Internal Revenue Service's criminal investigation division, the Department of Commerce and the Federal Deposit Insurance Corp was connected with an IRS probe related to a Swiss parts unit, Caterpillar SARL.