Kaplan Fox is the court appointed co-lead counsel in the securities class action against SunPower Corporation (“SunPower” or the “Company”) and other related defendants in connection with SunPower’s recent disclosure that it had materially misstated its financial results. In this case, Kaplan Fox represents the Arkansas Teacher Retirement System (“ATRS”), one of the appointed lead plaintiffs. ATRS was appointed Lead Plaintiff on March 5, 2010.
On May 28, 2010, Lead Plaintiffs filed the Consolidated Complaint for violation of the federal securities laws (“Complaint”). Plaintiffs assert claims against SunPower and certain individuals, including its Chief Executive Officer (Thomas H. Werner) and its Chief Financial Officer (Dennis V. Arriola), as well as its former Chief Financial Officer (Emmanuel T. Hernandez), for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder. Plaintiffs also assert claims under Sections 11 and 15 of the Securities Act of 1933 for materially untrue statements and omissions in connection with SunPower's September 2008 Registration Statement and Prospectus and SunPower's April 2009 debt and equity offerings.
The Complaint alleges that Defendants materially misstated the Company’s reported financial results throughout the Class Period. On November 16, 2009, after the market closed, SunPower disclosed that an “internal review” had uncovered “unsubstantiated accounting entries” in the Company’s prior financial reports that understated the Company’s cost of goods sold in 2009 and possibly 2008. In reaction to that news, SunPower’s common stock price dropped from $27.23 per share on November 16, 2009 to close at $22.19 per share on November 17, 2009 (a drop of approximately 19%) on unusually heavy trading volume.
Then, on March 18, 2010, the Company announced that it had completed its internal investigation and it would restate its financials for each quarter and for the year ended December 28, 2008, as well as for the first three quarters of the year ended January 3, 2010. Also, the Company disclosed that the investigation had revealed that SunPower finance personnel had falsified certain accounting entries, and that additional accounting "errors" had been committed. SunPower also admitted material weaknesses in the Company's internal controls over financial reporting.
Defendants moved to dismiss the complaint on August 5, 2010 and Lead Plaintiffs are scheduled to respond to defendants' motions to dismiss on or about September 22, 2010.