First Solar Targeted by Class-Action Lawsuit; Alleges Defrauding of Investors
First Solar, the Tempe-based solar-panel manufacturing company, is being targeted by a class-action lawsuit alleging its principals hid negative facts to mislead investors.
The federal complaint (see below) comes about a week after the company revealed that it was being investigated by the U.S. Securities Exchange Commission for alleged problems with disclosing information about its Topaz solar project. However, the complaint addresses wider issues.
Filed by the national law firm Pomerantz Haudek Grossman & Gross LLP on behalf of investor Mark Smilovits, the complaint states that First Solar repeatedly misstated its earnings and other facts about the company in public documents from April 30, 2008 to February 28, 2012.
After the company released a report on February 29 that showed a large decrease in sales, the stock price plummeted by 11 percent. The suit states:
As a result of the dissemination of the aforementioned false and misleading reports, releases and public statements, the market price of First Solar securities was artificially inflated throughout the Class Period.
In ignorance of the adverse facts concerning First Solar's business and financial condition which were concealed by defendants, Plaintiff and the other members of the Class purchased First Solar securities at artificially inflated prices and relied upon the price of the securities, the integrity of the market for the securities and/or upon statements disseminated by defendants, and were damaged thereby.
Besides the company itself, the complaint names as defendants First Solar founder Michael J. Ahearn and former CEO Robert Gillette, who was forced out of the company in October.
First Solar is one of the solar-energy companies sent reeling in the past year as solar-panel prices dropped by about 50 percent.
The Pomerantz law firm is seeking to add other alleged victims to its suit. Click here for a copy of the complaint.
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Phoenix, delivered to your inbox Monday through Friday.