New York, New York - Pomerantz Haudek Grossman & Gross LLP has filed a federal securities class action (1:12-cv-10591) in the United States District Court, District of Massachusetts, on behalf of all persons who purchased A123 Systems, Inc. ("A123" or the "Company") (Nasdaq:AONE) securities between February 28, 2011 and March 23, 2012 inclusive (the "Class Period").
This class action is brought under Sections (10)b and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder against the Company and certain of its top officials.
A123 designs, develops, manufactures and sells advanced, rechargeable lithium ion batteries and battery systems. The Complaint alleges that throughout the Class Period, defendants made false and/or misleading statements, or failed to disclose material information regarding manufacturing flaws in its Livonia, Michigan facility.
On March 26, 2012, the Company disclosed that it would incur costs of over $55 million in the next several quarters to replace battery modules and packs that might be defective. Specifically, five auto customers received parts that likely contained defective prismatic cells.
The $55 million represents approximately one quarter of the Company's projected annual revenue for 2012, which A123 has estimated to be between $230 million and $300 million. On these revelations, A123 shares declined $0.21 per share or more than 12%, to close at $1.49 per share on March 26, 2012.
On March 28, 2012, an analyst at Deutsche Bank wrote that the Company may be unable to raise capital as a result of this charge and could lose contracts as a result of the recall. As a result of this news, the Company's stock declined an additional $0.18 per share or nearly 13%, to close at $1.22 per share on March 28, 2012.
The Pomerantz Firm, with offices in New York, Chicago, and Washington, D.C., is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 70 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com.