Schubert Firm Launches Investigation into Wrongdoing by Solar City Executives
The Schubert firm is investigating claims against certain officers and directors of SolarCity Corporation for breaches of their fiduciary duties to SolarCity. SolarCity designs, installs and sells or leases solar energy systems in the United States to government entities and residential and commercial customers.
On March 3, 2014, SolarCity announced that it had discovered an error in its financial reporting, which resulted in improper classification of millions of dollars in overhead expenses. SolarCity announced that its financial statements as of December 31, 2012 and for the periods ended March 31, 2012, June 30, 2012, September 30, 2012, March 31, 2013, June 30, 2013 and September 30, 2013, should no longer be relied upon. SolarCity further disclosed that it would recognize a downward adjustment of assets related to solar energy systems leased and to be leased and an upward adjustment to the costs of solar energy system sales in those periods.
On March 18, 2014, the Company further disclosed that it had discovered errors related to its accounting for non-cash stock based compensation costs, and related to its classification of certain of its noncontrolling interests in subsidiaries. As a result, the Company’s prior financial statements for the annual periods ended December 31, 2010, 2011 and 2012 should no longer be relied upon.
Between the opening of the market on March 3, 2014 and the market’s close on March 19, 2014, SolarCity’s share price dropped approximately 13%.
Class actions have been filed against the Company and certain of its officers on behalf of persons or entities who purchased shares in SolarCity between March 6, 2013 and November 18, 2014 in the District Court for the Northern District of California. These lawsuits allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
If you are a current SolarCity shareholder, contact us to obtain more information regarding our investigation by filling out the form at right.