In New York state, a securities class action lawsuit has been filed on behalf of investors who purchased or acquired the securities of Renewable Energy Group, Inc. (NASDAQ: REGI) from May 3, 2018, through February 25. The lawsuit filed in the United States District Court for the Southern District of New York alleges violations of the Securities Exchange Act of 1934.
The complaint alleges that throughout the Class Period, defendants made materially false and/or misleading statements, as well as failed to disclose to investors: (1) that due to failures in the diesel additive system, petroleum diesel was not periodically added to certain loads by the Company and was instead added by the Company’s customers; (2) that, as a result, Renewable Energy was not the proper claimant for certain BTC payments on biodiesel it sold between January 1, 2017 and September 30, 2020; (3) that, as a result, Renewable Energy’s revenue and net income were overstated for certain periods; (4) that there was a material weakness in the Company’s internal control over financial reporting related to the purchase and use of the petroleum diesel gallons when blending with biodiesel; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On February 25, 2021, after the market closed, Renewable Energy issued a press release announcing its fourth quarter and full year 2020 financial results. Therein, the Company revealed that it would restate “$38.2 million in cumulative revenue from January 2018 through September 30, 2020” because Renewable Energy was not the “proper claimant for certain BTC payments on biodiesel it sold between January 1, 2017 and September 30, 2020.” Renewable Energy further stated that it had reached an agreement with the Internal Revenue Service “on a $40.5 million assessment, excluding interest” to correct these claims.
On this news, the Company’s share price fell $8.17, or 9.5%, over two consecutive trading sessions to close at $77.77 per share on February 26, 2021, on unusually heavy trading volume.