Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against Ecotality, Inc and certain of its officers. The class action, filed in United States District Court, Northern District of California is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of Ecotality between April 16, 2012 and August 9, 2013 both dates inclusive. This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
Ecotality, engages in designing, manufacturing, testing, and commercializing electric vehicle (EV) charging and energy storage systems in the United States and internationally. Its primary products include the Blink line of charging stations for passenger vehicle applications, such as Blink Level 2 residential and commercial chargers, and the Blink DC Fast Chargers, as well as a turnkey network operating system for EV drivers, commercial businesses, and utilities; and the Minit-Charger line of fast-charge systems for off-road industrial applications, including material handling operations and airport ground service equipment.
The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company was facing an impeding shutdown of funds from the United States Department of Energy (DOE); (2) the Company was inappropriately recognizing revenue and drawing down expenses on its contract with DOE; (3) the Company's products contained significant design and manufacturing defects; (4) the Company lacked adequate internal controls over financial reporting; and, (5) as a result of the foregoing, the Company's statements were materially false and misleading at all relevant times.
On August 12, 2013, the Company disclosed that the DOE had suspended all payments to the Company, had ordered the Company to cease incurring new costs under its prior arrangement with DOE, and had ordered it to notify all of Ecotality's vendors of the DOE's action. The Company also disclosed that it was unable to correct design and manufacturing defects in its charging systems, likely requiring a recall of all connector plugs on the 12,000 charging stations it had installed to date; and that as a result, it had hired a restructuring adviser to evaluate options including filing a bankruptcy "in the very near future." On this news, Ecotality securities declined $1.16 per share or over 79%, to close at $0.35 per share on August 12, 2013.
Source: Pomerantz Grossman Hufford Dahlstrom & Gross LLP
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