ST. LOUIS (CN) – MEMC Electronic Materials violated securities laws and misled shareholders about production problems, a class action claims in Federal Court.
Lead plaintiff Minneapolis Firefighters’ Relief Association says MEMC and its CEO Nabeel Gareeb falsely led investors to believe that production problems between Sept. 30, 2007 and March 31, 2008 had been resolved.
But further issues in June 2008 at MEMC’s production facilities in Merano, Italy and Pasadena, Texas reduced the company’s output. Instead of disclosing the problems immediately to shareholders, the company did not disclose the problems for several weeks, the suit states.
In July 2008, Gareeb announced that MEMC’s performance fell below expectations because of the problems, causing the stock prices to fall and several analysts to criticize MEMC for not disclosing the problems earlier. The class consists of all MEMC common stockholders from June 13, 2008 to July 23, 2008. The class is represented by Steven Hamburg.