Neptune Technologies Securities Class Action Lawsuit

By Sarah Mirando | January 14, 2013

Category: Stocks & Securities Class Action Lawsuits

By Andrea Gressman

A securities fraud lawsuit was filed in the United States District Court in the Southern District of New York on behalf of all people or entities that purchased common stock of Neptune Technologies & Bioresources Inc. from December 12, 2011 to November 8, 2012. The securities lawsuit alleges that there were violations of the Securities Exchange Act of 1934 between the company and the plaintiffs.

The Canadian company, Neptune, develops as well as commercializes krill oil products that are removed from Antarctica krill. This is then provided to the nutraceutical, cosmetic, pharmaceutical, as well as the pet food markets. The securities fraud lawsuit claims that throughout the class action period Neptune made false claims as well as misleading statements. They are also accused of omitting materials that would have made the company essentially look bad in the eyes of the investor.

One specific allegation raised in the Neptune securities fraud lawsuit is that the company failed to disclose that they had opted to use an aggressive policy when it came to the volume of discounts they were using to secure market shares. They also allegedly failed to disclose that they did not get required permits for one of their large expansion projects that they had underway. Because of the inaccuracies of the company’s statements the securities lawsuit claims that the company’s stock was then traded at prices that had been artificially inflated.

The Neptune securities lawsuit goes on to state that the product expansion was bragged about by the company, including new production technologies that were supposedly state of the art. They also boasted of increased revenues, earning, and profit margins. Because of their stock prices that had been falsely inflated, they took in over $34 million in registered public stock offerings. This subsequently raised the capital that was then used to fund their expansion.

However, it was later discovered that the actual equipment installed at the facility contained dangerous acetone levels, which led to a fire and explosion that destroyed the production facility location and damaged the expansion on November 8, 2012. The company’s capabilities to manufacture have been brought to a halt for an indefinite period of time. The trading of the company stock also came to a halt as well due to the fire but it resumed on November 27, 2012, although it was down nearly 32% from the closing day when the fire occurred. Neptune’s future business is marked with uncertainty at this point as they cannot produce any of their own krill oil. They also could be subject to a number of criminal and civil liabilities due to the fire and explosion.

Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.