Jun 25, 2015, 05:45 ET
SAN DIEGO and SOUTH SAN FRANCISCO, Calif., June 25, 2015 /PRNewswire/ -- Shareholder rights law firm Robbins Arroyo LLP announces that a federal securities fraud class action complaint was filed in the U.S. District Court for the Northern District of California. The complaint alleges that officers and directors of Solazyme, Inc. (NASDAQ: SZYM) violated the Securities Exchange Act of 1934 between February 27, 2014 and November 5, 2014, by engaging in a fraudulent scheme to artificially inflate the prices of Solazyme securities. Solazyme manufactures and sells renewable oils and other bioproducts and maintains facilities in California, Illinois, Iowa, and Brazil.
View this information on the law firm's Shareholder Rights Blog:
Solazyme Misrepresents Its Business Practices
According to the complaint, Solazyme officials made false and misleading statements and concealed material information relating to the construction progress, development, and production capacity of the Company's production facility in Moema, Brazil. The facility was designed to transform sugarcane into oil products with a projected production capacity of 100,000 metric tons of oil per year and was initially targeted for completion around the end of 2013.
In particular, the complaint alleges that Solazyme officials periodically offered positive assessments of its progress toward nameplate capacity at the facility, when it actually was experiencing difficulties due to insufficient access to electricity and steam utility services. In addition, Solazyme was experiencing construction problems preventing the company form scaling its production in a cost-effective manner. By improperly concealing these difficulties, Solazyme officials caused the company's securities to trade at artificially inflated prices. The complaint further alleges that company officials made false and misleading statements and failed to disclose material adverse information in offering documents in connection with the issuance of $149 million in convertible notes and 5.75 million shares of stock valued at approximately $63.25 million.
Solazyme finally acknowledged the significant and wide ranging construction delays on November 5, 2014. The Company revealed that it would focus on producing smaller volumes of higher value products at the facility due to the utility issues it had been facing. On this news, Solazyme's stock price declined $4.35 per share, or 58%, to close at $3.14 per share on November 6, 2014. Similarly, the market price of Solazyme's Notes declined by $235.00 per Note, or 30.32%, to close at $540.00 per Note on November 7, 2014.
Solazyme Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, [email protected], or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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Darnell R. Donahue
Robbins Arroyo LLP
600 B Street, Suite 1900
San Diego, CA 92101
(619) 525-3990 or Toll Free (800) 350-6003
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SOURCE Robbins Arroyo LLP
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