Unfortunate news blows in for one of Colorado’s top employers as Vestas Wind Systems faces a class action lawsuit filed in Colorado’s U.S. District Court. The lawsuit alleges that the wind turbine company that employs roughly 1600 Coloradoans violated the U.S. Securities Exchange Act of 1934.
The suit alleges that misleading information was posted about the company’s
2010 earnings, which resulted in losses to investors of Vestas stock and
their pension fund. Four of Vestas’ officers are singled out for
knowingly releasing the false statements in financial reports and press releases.
Apparently an accounting procedure, which failed to be implemented by
its January 2010 due date would have prevented the false statements from
being disseminated. Vestas did not make this accounting change until November of 2010.
During the time period in question, it is alleged that ordinary shares
traded at unnaturally inflated prices. Then when sobering second quarter
news was posted, stating that several million dollars in revenue would
have to be deferred, the market reacted accordingly with a 22.5 share
drop in one day.
The lawsuit goes on to accuse Vestas officers of benefiting by receiving
millions of Euros in salary and incentive-based compensation.
Vertas and its individual defendants are planning on vigorously defending
this lawsuit claiming that the suit was filed without merit. So you make
the call, meritorious claim or a lot of hot air?