First Solar Faces Investor Lawsuits Over Business Claims In the US

Starting off the new year on the wrong foot, US solar panel manufacturer First Solar has recently found itself embroiled in a number of lawsuits alleging fraud.

Shareholder rights law firm Johnson Fistel announced last week that a class action lawsuit has commenced on behalf of investors of First Solar who purchased the company’s stock between February 22, 2019 and February 20, 2020, during which time the firm allegedly made repeated misrepresentations to shareholders regarding the development of its newest “Series 6” solar module, the cost per unit it could achieve with that module, and the impact the changeover to this new product would have on the viability of its other business segments. As a result of these alleged misrepresentations, First Solar common stock traded at artificially inflated prices during this time.

The same week, investor rights law firm Bernstein Litowitz Berger & Grossmann also filed a class action lawsuit in the U.S. District Court for the District of Arizona against First Solar and certain of its senior executives. BLB&G filed this action on behalf of its client, City of Pontiac General Employees’ Retirement System, who had also invested in the company’s common stock during the aforementioned period, i.e. between February 22, 2019 and February 20, 2020.

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It is alleged that the truth about First Solar’s difficulties transitioning to the Series 6 solar module was revealed through a series of disclosures. First, on January 15, 2020, Barclays reported that First Solar had seemingly been priced-out of the U.S. solar market, and that the company had obfuscated its rapidly declining market share through misleading financial reporting. On February 6, 2020, Barclays further reported that First Solar’s aggressive attempts to win back market share were leading to lower Project Development contract prices and cutting into the Company’s margins.

Then, on February 20, 2020, First Solar announced that it was exploring a sale of its Project Development business. Further, the company acknowledged that it was experiencing “challenges with regard to certain aspects of the overall cost per watt” and that the Company would no longer be disclosing a discrete cost per watt for its Series 6 units. As a result of these disclosures, First Solar’s share price declined precipitously.

The Law Offices of Frank R. Cruz, which investigates and prosecutes class action lawsuits for violations of securities fraud and corporate malfeasance, today announced an investigation of First Solar on behalf of concerned investors regarding the company’s possible violations of federal securities laws in the U.S.

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