SolarCity Corp (NASDAQ:SCTY) has been sued by an investor over an alleged breach of Federal Securities Laws concerning providing false and misleading statements, according to the Shareholders Foundation. A lawsuit has been filed in the U.S. District Court for the Northern District of California over the statements made between March 6, 2013 and March 18, 2014.
SolarCity sued on behalf of all entities
SolarCity Corp (NASDAQ:SCTY) has been alleged on behalf of the all persons or entities, who acquired the company’s shares between March 6, 2013 and March 18, 2014. According to the lawsuit, some of the officers and directors breached the Federal Securities Laws of Securities Exchange Act of 1934.
The lawsuit claims that SolarCity provided false and/or misleading statements and/or failed to disclose that the company does not have proper checks over financial reporting. The company has been accused of mus-classifying its reported expenses and that the financial statements required corrections.
The Shareholders Foundation has invited SolarCity shareholders to join the lawsuit against the company.
Accounting errors in the SolarCity financial statements
At the beginning of March, SolarCity Corp (NASDAQ:SCTY) informed about the delay in filing its Annual Report for the year ended December 31, 2013. The company also announced the delay in submitting the expected restatement of its 2012 consolidated financial statements. Then, on March 18, 2014, the solar firm gave more information on the restatement. On the same day, the company also informed the investors via a SEC filing that the earlier financial statements for the year 2010, 2011 and 2012 should not be relied on, owing to accounting errors like including non-cash stock based compensation in cash flows and errors concerning the accounting of the non-controlling interests in subsidiaries. SolarCity also stated that these errors impacted the 2013 interim and 2012 annual and interim consolidated financial statements.
For the fourth quarter, SolarCity Corp (NASDAQ:SCTY) posted an adjusted loss of $0.46 per share compared to $0.58 expected by analysts. Revenue for the company came in at $47.3 million against the consensus estimate of $45.1 million. For the first quarter, management expects a loss of $0.70-$0.80 per share while analysts are expecting a loss of $0.50 per share.
SolarCity Corp (NASDAQ:SCTY) shares were down to as low as $53.18 on April 7, 2014 from the highs of over $88 per share in February. On Tuesday, shares of the company closed at $53.43 per share.