Dallas, Texas 06/25/2015 (Financialstrend) – Robbins Geller Rudman & Dowd LLP has filed a class action lawsuit against Solazyme Inc (NASDAQ:SZYM). The law firm alleges that the company provided shareholders with materially false and misleading statement regarding its production facility located in Moema Brazil. The Complainant alleges that in the process, the company violated the Securities Exchange Act of 1934 and the securities act of 1933.
Allegations against Solazyme
Failure of the company to disclose adverse information about the ongoing progress in the construction of the facility is the bone of contention in the lawsuit. Solazyme Inc (NASDAQ:SZYM) is accused of failing to admit that it was experiencing construction delays attributed to insufficient access to electricity as well as steam utility services.
The challenges are reported to have delayed the Moema facility from scaling its production capacity as expected. The Complainant alleges that as a result of the misleading statements, Solazyme Inc (NASDAQ:SZYM) traded at relatively inflated prices in the market. This could not have been the case had the company come out and acknowledged the challenges it was facing; the claims alleges.
It was only on May 5, 2014, during the company’s first-quarter conference call that CEO acknowledged that the Moema facility was not able to bring its first commercial product to market because of the said challenges. Solazyme Inc (NASDAQ:SZYM) then acknowledged on November 5, 2014, wide-ranging construction delays that it said forced it to narrow its production.
The company consequently opted to shift its focus to producing smaller volumes of higher value products to offset the production capacity constraints. The news caused the stock to plummet by $4.35 per share closing November 6, 2014, trading session on a low of $3.14 a share.
The plaintiff is seeking to recoup damages on behalf of all the purchasers who had bought Solazyme Inc (NASDAQ:SZYM) securities between February 27, 2014, and November 5, 2014.