SunPower Corporation ("SunPower" or the "Company") designs and manufactures high-performance solar electric power technologies. This class action is brought on behalf of all purchasers of SunPower securities from April 17, 2008 through November 16, 2009 inclusive (the "Class Period") against SunPower and certain of its executive officers, as well as certain investment banks that acted as underwriters for SunPower's April 2009 debt and equity offerings, for violations of the federal securities laws. On March 5, 2010, the Hon. Charles R. Breyer appointed BLB&G client Första-AP Fonden as Co-Lead Plaintiff and BLB&G as Co-Lead Counsel for the Class. The case was subsequently reassigned to the Hon. Richard Seeborg.
On May 28, 2010, Lead Plaintiffs filed the Consolidated Complaint for Violation of the Federal Securities Laws ("Complaint"). Plaintiffs assert claims against SunPower, its Chief Executive Officer and its Chief Financial Officer (Thomas H. Werner and Dennis V. Arriola), and 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(a) 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.
This case concerns false accounting at SunPower that materially misstated the Company's reported financial results. After the markets closed on November 16, 2009, 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. The Company also announced it was working to determine if any restatements of its 2009 interim financial reports and its 2008 annual report would be necessary. Investors reacted immediately to the news, driving the price of SunPower stock down approximately 20% in a single day on unusually high trading volume.
On March 18, 2010, the Company announced that it had completed its internal investigation and that it would restate its financial statements for each quarter and for the year ended December 28, 2008, as well as the first three quarters in the year ended January 3, 2010. The investigation determined 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.
On August 6, 2010, the defendants filed motions to dismiss the Complaint. Lead Plaintiffs filed their oppositions to the motions to dismiss on September 22, 2010 and Defendants filed reply briefs on October 21, 2010. The Court heard oral argument on November 4, 2010, and on March 1, 2011, the Court granted defendants' motion to dismiss with leave to amend.
On April 18, 2011, Plaintiffs filed the First Amended Consolidated Complaint in accordance with the Court's March 1, 2011 Order. Defendants filed a motion to dismiss the First Amended Consolidated Complaint on May 23, 2011, which Plaintiffs opposed. On August 11, 2011, the Court held a hearing on Defendants' motion to dismiss the First Amended Consolidated Complaint. On October 18, 2011, the parties filed a stipulation to reschedule the Case Management Conference to January 12, 2012, or until such other date after the Court has ruled on Defendants’ motion to dismiss.
On December 19, 2011, the Court issued its Order sustaining all of Plaintiffs' claims against the Company and the Officer Defendants for violations of the Exchange Act and dismissing scheme liability claims against the Company's former Controller and former Philippines Finance Director. Defendants' Answer is due on January 27, 2012. Accordingly, the case is now in the discovery phase.
