According to the law firm press release, the Complaint charges that Defendants made materially false and/or misleading statements by misrepresenting and failing to disclose certain adverse facts, including that PowerSecure lacked the experience and internal controls necessary to expand its distributed generation business into larger contracts.
On May 7, 2014, PowerSecure reported its first quarter 2014 financial results, including an adjusted loss of ($0.17) per share compared to analysts’ earnings estimate of $0.02 per share. PowerSecure disclosed that it “mis-timed actions to shift resources to more profitable customers, as revenues from those new customers were not adequate to sustain our margins,” resulting in gross margins to decrease to 20.9% in the first quarter from 30.6% a year earlier. Thus, PowerSecure admitted contrary to representations as recently as March 10, 2014 that PowerSecure’s gross margins would remain “in the mid to upper 20%-range.”
On this news, PowerSecure shares declined $11.60 per share or 62%, to close at $7.00 per share on May 8, 2014.
On September 13, 2016, the Court issued an Order dismissing this case. On October 7, Plaintiffs filed a Notice appealing the decision of the District Court. On November 15, 2017, the Court of Appeals affirmed the District Court's decision.