Securities Fraud Suit Filed against Solazyme, Inc.
On June 29, 2015, the news media announced that a securities fraud class action lawsuit has been filed against Solazyme, Inc. in the U.S. District Court covering the northern district of California. The suit was filed on behalf of investors who held shares in Solazyme between February 27, 2014, and November 5, 2014. This announcement came just one week after an entirely separate class action suit alleging similar conduct at Solazyme commenced.
The lawsuits both allege that Solazyme lied or made misleading statements regarding the development of a new facility the company was planning in Moema, Brazil. Claims against Solazyme include allegations that the company was dishonest in matters pertaining to the progress of the construction project located there, the timeline of development, and the planned capacity of the premises. The project was intended to produce renewable oil for energy projects throughout the U.S. However, the development of the structure was delayed by poor access to electricity and difficulties in wiring, as well as limits on steam utility services, a necessary component of the new facility. The delays were so substantial that the plant failed to produce any product at all on the established timeline, and management agreed to place new limitations on the facility, converting it mid-construction from a rapid-capacity production facility for commercial products to a much more limited facility for smaller volumes of more expensive renewable oil products.
The lawsuits claim that Solazyme executives failed to disclose this negative information regarding the construction and the planned facility, as well as the change in eventual production, in a timely manner to both the Securities Exchange Commission and to investors. In fact, counsel for plaintiffs allege that Solazyme’s chief executive officer communicated that the project was proceeding precisely as expected.
The accusations from the class of plaintiffs state that with investors improperly informed, shares of Solazyme traded at $11.00 per share, an artificially inflated price resulting in gross proceeds for the company at $63.25 million, and eventually massive losses for investors. When the truth about Solazyme’s construction delays and limited capabilities came out on November 5, 2014, the price of Solazyme stock dropped by 58%.
If you were an investor with Solazyme during the stated time period, you may be eligible to join one or more of the class action lawsuits or to retain your own legal representation and initiate a claim of your own. For all of the currently active suits, the class has yet to be certified by the courts, meaning that unless you do retain counsel, you are not represented any attorneys, including those that initiated the suits.
If you have been the victim of securities fraud, consider seeking legal advice. It may be possible to recover all or part of your losses. You can contact an experienced investment and financial attorney at Carlson & Associates, P.A. in Miami at 1-305-372-9700 today for a consultation.