According to the law firm press release, SolarCity purports to sell renewable energy to its customers at prices below utility rates, primarily through the leasing or sale of solar energy systems.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, defendants made false and/or misleading statements and/or failed to disclose that: (i) the Company lacked adequate controls over financial reporting; (ii) the Company misclassified its reported expenses; (iii) the Company's prior financial statements required restatement; and (iv) as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On March 3, 2014, the Company announced that it had discovered an error in its financial reporting, disclosing tens of millions in overhead expenses that it had incorrectly classified. On this news, SolarCity securities declined 1.70 per share, or over 2%, to close at 83.26 per share on March 3, 2014.
On March 18, 2014, the Company issued a press release providing more information regarding its restatement. That same day, the Company filed an 8-K report informing investors that its prior financial statements for the annual periods ended December 31, 2010, 2011 and 2012 should no longer be relied upon, "as a result of (i) an error related to the presentation of non-cash stock based compensation costs in the consolidated statement of cash flows for the portion of such costs that were capitalized as part of the costs of solar energy systems leased and to be leased; and (ii) an error related to the classification of certain of the noncontrolling interests in subsidiaries after the Company concluded that certain noncontrolling interests with redemption rights should be presented in temporary equity and not permanent equity as had previously been disclosed. These matters also impacted the 2013 interim and 2012 annual and interim consolidated financial statements referred to in our Form 8-K filed on March 3, 2014."
On this news, the Company's shares fell 4.40, or almost 6%, to close on March 19, 2014 at 72.70 per share on unusually high trading volume.
On August 11, 2014, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel. Lead Plaintiff filed an amended complaint on October 13.
On April 27, 2015, the Court dismissed the complaint with leave to amend. Plaintiffs filed an amended complaint on June 19.
On January 5, 2016, the Court dismissed the second amended complaint with leave to amend. Plaintiffs filed an amended complaint on February 15.
On August 9, 2016, the Court issued an Order granting Defendants' Motion to Dismiss with prejudice. Lead Plaintiff filed a Notice appealing this decision on August 15. On March 8, 2018, the Court of Appeals affirmed the District Court's decision to dismiss the case.