Robbins Arroyo LLP: Solazyme, Inc. (SZYM) Misled Shareholders According to a Recently Filed Class Action
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.
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 or you can complete the form below and we will contact you directly.