A class action lawsuit has been filed in the United States District Court for the District of Nevada on behalf of a class consisting of all persons or entities who purchased the securities of Ormat Technologies, Inc. (NYSE: ORA) between May 6, 2008 and February 24, 2010, inclusive (the “Class Period”).
The Complaint charges Ormat and certain of the Company’s executive officers with violations of federal securities laws. Ormat and its subsidiaries engage in the geothermal and recovered energy power business in the United States and internationally. The Company develops, builds, owns and operates geothermal and recovered energy-based power plants, and sells electricity and equipment for geothermal and recovered energy-based electricity generation. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning Ormat’s business, operations and prospects were materially false and misleading. Specifically, defendants made false and/or misleading statements and/or failed to disclose: (1) that the Company was improperly continuing to capitalize costs for individual projects after Ormat had decided to abandon further exploration and development of individual projects instead of expensing those costs in the period in which any such determination was made; (2) that, as a result, the Company’s financial results were overstated during the Class Period; (3) that the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (4) that the Company lacked adequate internal and financial controls; and (5), as a result of the above, that the Company’s financial statements were materially false and misleading at all relevant times.
On February 24, 2010, Ormat disclosed that the Board of Directors and Audit Committee of the Company, upon recommendation of management, had concluded that the Company’s financial statements for the year ended December 31, 2008 (the “2008 Financial Statements”) contained in its Annual Report on Form 10-K for the year then ended require restatement and should no longer be relied upon, and additionally, that the Company’s prior related earnings and news releases and similar communications should also no longer be relied on to the extent they related to the 2008 Financial Statements. The Company announced that the restatement would show a change in the Company’s accounting treatment for certain exploration and development costs. According to Ormat, these costs were capitalized on an area-of-interest basis using an accounting method that is analogous to the full cost method, and upon review of this accounting treatment in response to comment letters from the Staff of the SEC, the Company concluded that this accounting treatment was inappropriate in certain respects. Ormat additionally indicated that the Company planned to revise its consolidated financial statements as of and for the three- and nine-month periods ended September 30, 2009.
As a result of this news, Ormat shares declined $1.28 per share, or nearly 4%, to close on February 24, 2010, at $31.90 per share, and further declined over the following two days to close on February 26, 2010, at $28.93 per share, on heavy trading volume. Over the course of these three days of trading, Ormat shares declined a total of 12.81%, or $4.25 per share.
If you are a current shareholder and purchased during period between May 6, 2008 and February 24, 2010 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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