WAYNE, USA: Ryan & Maniskas LLP announced that a class action lawsuit has been filed in the United States District Court for the District of Massachusetts on behalf of purchasers of the common stock of American Superconductor Corp. between November 2, 2010 and April 5, 2011, inclusive.
The Complaint charges AMSC and certain of its executive officers with violations of federal securities laws. Specifically, defendants failed to disclose the following adverse facts: (1) AMSC was providing Sinovel Wind Group Co. Ltd with contracted shipments in excess of its needs; (2) Sinovel was not paying AMSC for certain contracted shipments; (3) AMSC was continuing to provide Sinovel with contracted shipments although Sinovel was not paying for certain prior shipments; (4) that AMSC was improperly recognizing revenue on those contracted shipments to Sinovel; (5) as a result, AMSC’s revenues were overstated; and (6) the Company lacked adequate internal and financial controls.
On April 5, 2011, AMSC disclosed that on March 31, 2011 that Sinovel refused to accept contracted shipments, and AMSC believed Sinovel intended to reduce its level of inventory before accepting any further contracted shipments. According to the Company, the delayed shipments were the primary cause for lower-than-anticipated financial results for AMSC’s fourth quarter and full fiscal year 2010.
Additionally, AMSC disclosed it was reviewing the appropriateness of the timing of its revenue recognition on approximately $56 million of unpaid shipments in the second, third and fourth quarters of fiscal 2010. On this news, the company’s shares declined $10.41 per share, or 41.84 percent, to close on April 6, 2011, at $14.47 per share, on unusually heavy trading volume.