EnerNOC Investor's Action Nixed As Implausible

EnerNOC Investor's Action Nixed As Implausible - 5/15/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

EnerNOC Investor's Action Nixed As Implausible
Christie Smythe

Securities Law 360. May 15, 2009
_________________________________________________________________________

EXCERPT: Finding that an EnerNOC Inc. shareholder's allegations “simply aren’t plausible,” a judge has dismissed a putative securities class action against the utility grid service provider over its recording of much steeper losses than projected in 2007. Judge Rya W. Zobel of the U.S. District Court for the District of Massachusetts on Wednesday granted EnerNOC's bid to dismiss investor Matt Gunther's complaint in its entirety on the grounds that Gunther failed to sufficiently plead his claims. Primarily addressing fraud and misrepresentation-related claims made under sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, Judge Zobel found that Gunther failed to demonstrate that the principals of EnerNOC misled investors about the potential for losses and failed to allege scienter. A 2007 Form 10-Q and investor prospectus were “brimming with disclosures and advisories regarding the company’s operating expenses,” the judge said. “These disclosures were sufficient to warn investors that the company expected its operating expenses to be high relative to its revenue for the foreseeable future,” she said. Gunther alleged that the company led investors to believe that an increase in megawatts under EnerNOC’s management would correspond to an immediate increase in revenue, setting the company's stock up for a massive drop after the company revealed much higher losses than expected. According to Judge Zobel, however, the plaintiff did not point to enough examples suggesting that management meant to convey that an increase in megawatts would necessarily result in an increase in revenue for a given quarter. On the point of scienter, the judge also found the plaintiff’s allegations weak. In trying to demonstrate that requirement, Gunther pointed to stock sales by six defendants in connection with a secondary public offering and an April 2008 order by the Federal Energy Regulatory Commission, which “suggested that EnerNOC and other market participants were ‘gaming’ the system” for grid operator ISO New England Inc.’s loss response program. “The fact that EnerNOC may have been investigated by FERC does not get the plaintiff very far,” the judge said.

Back to News page | Back to Archived News 2009 page | Back to Top

�