SunPower reaches $19.7 million class action settlement17. December 2012 | Industry & Suppliers, Markets & Trends | By: Becky Beetz
SunPower Corp. has agreed to settle a private securities class action suit, which was launched against itself and members of its management, for US$19.7 million.
The U.S.-based photovoltaics company has agreed to settle on the "In re SunPower Securities Litigation," which was launched on behalf of all purchasers of SunPower securities from April 17, 2008, to November 16, 2009, against SunPower, its CEO Thomas Werner, CFO Dennis Arriola and former CFO Emmanuel T. Hernandez.
The complainants accused SunPower of false accounting, which "materially misstated the company's reported financial results".
"After the markets closed on November 16, 2009, SunPower disclosed that an 'internal review' had uncovered 'unsubstantiated accounting entries' in the Company's prior financial reports that understated the Company's cost of goods sold in 2009 and possibly 2008. The Company also announced it was working to determine if any restatements of its 2009 interim financial reports and its 2008 annual report would be necessary," wrote law firm Bernstein Litowitz Berger & Grossmann LLP. The news prompted SunPower’s stock to fall 20% in a single day.
Meanwhile, in March 2010, SunPower announced it would restate its financial statements for each quarter and for the year ended December 28, 2008, as well as the first three quarters in the year ended January 3, 2010, having completed its internal investigation. "The investigation determined that SunPower finance personnel had falsified certain accounting entries, and that additional accounting 'errors' had been committed. SunPower also admitted material weaknesses in the Company's internal controls over financial reporting," continued the lawyers.
While SunPower maintains both it and its management have "met all their legal obligations," it has agreed to pay $19.7 million to the claimants. The impacts are expected to be recorded in the company’s Q4 2012 financial results.
"We have decided it is more prudent to focus our efforts on growing new markets and continuing to expand our leading residential market share position," commented Lisa Bodensteiner, SunPower executive vice president and general counsel.
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