According to the law firm press release, the complaint charges SandRidge and certain of its officers and directors with violations of the Securities Exchange Act of 1934. SandRidge, together with its subsidiaries, operates as an independent natural gas and oil company in the United States. The Company engages in the exploration, development, and production of oil and gas properties.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s operational status and financial projections. Specifically, according to the complaint, defendants misrepresented and/or failed to disclose the following adverse facts, among others: (a) that they had been overstating the value of SandRidge’s Mississippian formation assets throughout the Class Period as contrary to their repeated mantra that SandRidge had successfully transformed itself from a primarily natural gas to a primarily oil producing company, when in reality its Mississippian formation assets consisted of significantly higher low-margin natural gas deposits and significantly lower high-margin oil deposits than the market had previously been led to believe; (b) mechanical issues with one of three rigs the Company needed to drill in its new Gulf of Mexico assets acquired in the Dynamic Offshore Resources LLC acquisition in early 2012 rendered that rig inoperable during the second quarter of 2012, requiring that defendants ramp down drilling in the Gulf of Mexico; (c) that contrary to their Class Period statements, defendants intended that the $1.3 billion Dynamic Offshore acquisition be utilized as a “financing vehicle” for the Company’s onshore drilling projects; and (d) that as a result, defendants knew SandRidge’s fiscal year 2012 earnings guidance was not attainable.
The Complaint further alleges that defendants shocked the market between November 8, 2012, after the close of trading, and November 9, 2012, before the opening of trading, by disclosing that they had been grossly overstating the proportion of oil-producing versus natural gas producing assets in the Company’s Mississippian formation throughout the Class Period. Defendants also disclosed that they intended to sell the remaining interest in the Company’s Permerian Basin assets, though those assets were the Company’s highest-margin oil producing assets.
On this news, SandRidge’s stock fell precipitously from its November 8, 2012 closing price of $6.10 per share to close at $5.51 per share on November 9, 2012, or 9%, on extremely high volume of more than six times the average daily trading volume over the prior three month period.
On March 6, 2013, the Court issued an Order appointing lead plaintiffs and approving the selection of lead counsel.
On July 23, 2013, Lead Plaintiffs filed a Consolidated and Amended Complaint. On July 30, a corrected version of this Complaint was filed.
On October 23, 2015, a second amended complaint was filed.
On October 21, 2016, a third amended complaint was filed.