Energy Recovery Executives Under Investigation

We have launched an investigation into whether certain officers and directors of Energy Recovery, Inc. (NASDAQ: ERII) breached their fiduciary duties by making false and misleading statements to shareholders and the market. Energy Recovery provides energy solutions to industrial fluid flow markets by converting wasted pressure energy into reusable assets and preserving or eliminating pumping technology in hostile processing environments.

On January 27, 2016 the United States District Court for the Northern District of California upheld securities fraud class action claims against Energy Recovery and certain of its officers and directors regarding contractual negotiations with a prospective client. The Court found that former Chief Executive Officer Thomas S. Rooney, Jr. acted with “deliberate or conscious recklessness” in telling investors that Energy Recovery had secured a verbal agreement with a prospective client. The amended complaint filed in the class action on May 26, 2016 alleges additional violations of the federal securities laws during the period March 7, 2013 through March 5, 2015. Specifically, defendants are alleged to have made false and misleading statements regarding contractual negotiations with multiple prospective clients, commercial interest in oil and gas products, and the operability of core Energy Recovery products, causing the stock price to be artificially inflated.

Schubert Jonckheer & Kolbe's investigation concerns when and how much certain of Energy Recovery’s officers and directors knew or should have known of the false and misleading statements, and whether any corporate insider sold stock based on non-public information. Shareholders interested in seeking the recovery of damages on behalf of the company and securing other remedial measures should contact the firm.

Concerned shareholders who would like more information about their rights and potential remedies should contact Dustin Schubert via email at dschubert@schubertlawfirm.com or by telephone at (415) 788-4220, or fill out the form (at right). 

If You Bought A Near East Brand Product, You May Have a Legal Claim

Schubert Jonckheer & Kolbe LLP is investigating whether Near East brand food products, including rice pilaf, couscous and quinoa mixes, violate federal and/or California law prohibiting manufacturers from packaging food in misleadingly large containers. 

Both federal and California state law prohibit deceptive packaging.  Packaging can be deceptive even if the volume of the product contained therein is stated on the label, if the package as a whole is designed to mislead consumers into overestimating the amount of the contents.  Specifically, containers that do not allow consumers to view the contents of the packaging, and which contain “nonfunctional slack fill” are unlawful under both federal and California law.  21 CFR 100.100; Cal. Bus. & Prof. Code Sections 12601-12615.5. 

“Slack fill” is the difference between the capacity of a container and the actual volume of the product it contains.  In some cases “slack fill” may be lawful.  For example, when the contents of a package settle through ordinary handling, the container may be slightly less than full by the time the consumer opens it.  However, when the “slack fill” is not due to ordinary subsidence or some other functional purpose, it is unlawful.  Consumers who purchase products containing slack fill may be entitled to restitution or damages.

If you purchased a Near East brand product, and believe that the product was sold in a box with “nonfunctional slack fill,” you may have a legal claim.  Please fill out the form at right for a free legal consultation.

LendingClub Executives Under Investigation

We are investigating whether certain officers and directors of LendingClub Corporation (NYSE: LC) breached their fiduciary duties to the company and its shareholders by failing to implement adequate internal controls over financial reporting and disclosure procedures.

The investigation concerns the abrupt resignation of former Chairman and Chief Executive Officer Renaud Laplanche on May 9, 2016, and the truth revealed in the aftermath of his resignation. Following Laplanche’s resignation, the company announced that (1) it sold loans to an institutional investor that did not meet that investor’s standards, a violation of the company’s purported internal controls, and (2) the company had invested in Cirrix Capital LP, an entity that purchased loans on the LC platform in direct contradiction of the Company’s representations that it did not assume credit risk in loans facilitated by its marketplace. The following day Goldmann Sachs Group Inc. and Jeffries LLC stopped buying loans on the platform, potentially jeopardizing future securitization deals for the company. 

Following these announcements, LC shares plummeted, dropping more than 50% in one week and losing over $1.3 billion in market value. The stock now trades at less than 25% of its IPO price. 

In filings made with the U.S. Securities and Exchange Commission (the “SEC”), the Company admits that it suffered “material weaknesses in internal control over financial reporting” and that its “disclosure procedures were not effective, and were not operating at a reasonable assurance level as of December 31, 2015.” The company is now the subject of class action litigation and governmental and regulatory investigations arising from the matter.

Concerned shareholders who would like more information about their rights and potential remedies should contact Kathryn Schubert via email at kschubert@schubertlawfirm or by telephone at (415) 788-4220, or fill out the form (at right). 

Liquidity Services Executives Under Investigation

Schubert Jonckheer & Kolbe LLP has launched an investigation into whether certain officers and directors of Liquidity Services, Inc. (LQDT) breached their fiduciary duties by issuing false and misleading statements to shareholders and the market. Liquidity Services is an online auction marketplace for surplus and salvage assets.

On March 31, 2016, the United States District Court for the District of Columbia upheld securities fraud class action claims against Liquidity Services and certain of its officers and directors. The class action alleges that during the period February 1, 2012 through May 7, 2014, the defendants misrepresented the true condition of the company’s business. Specifically, defendants are alleged to have made false and misleading statements regarding the purported strength of the company’s retail and commercial capital assets divisions, causing the stock price to be artificially inflated. In addition, the class action alleges that Liquidity Services’ CEO sold $68.2 million of company stock at artificially inflated prices while the false and misleading statements were being made. Based on the allegations in the class action, the Court found that there was a “strong and cogent inference of scienter,” or intent to defraud.   

Schubert Jonckheer & Kolbe's investigation concerns when and how much certain of Liquidity Services’ officers and directors knew or should have known of the false and misleading statements, and whether any corporate insider sold stock based on non-public information. Shareholders interested in seeking the recovery of damages on behalf of the company and securing other remedial measures should contact the firm.

If you are a long-term holder of Liquidity Services stock and wish to obtain additional information about Schubert Jonckheer & Kolbe's investigation and your legal rights, please contact Dustin Schubert either via email at dschubert@schubertlawfirm.com or by telephone at (415) 788-4220, or fill out the form (at right).