Active Power, Inc. Sued by Investor
Robbins LLP announces that an investor of Active Power, Inc. (NASDAQ: ACPW) has filed a complaint in the U.S. District Court for the Western District of Texas. The complaint alleges that the company and certain of its officers violated the Securities Exchange Act of 1934 from April 30, 2013 to September 5, 2013 (the “Class Period”). Active Power, together with its subsidiaries, designs, manufactures, and services uninterruptible power supply products and modular infrastructure solution products that provide electrical power continuity and integrated infrastructure platforms for data centers.
Active Power Accused of Making False and Misleading Statements
According to the complaint, Active Power issued materially false and misleading statements about the company’s success in expanding its business into the lucrative Chinese market. Specifically, on April, 30, 2013, the company’s Chief Executive Officer, Doug Milner, announced that Active Power had entered into a strategic distribution agreement with China’s largest IT solutions provider, Digital China Information Service Company. Further, Mr. Milner emphasized that collaborative efforts with Digital China were under way that would lead to product deployments by the end of 2013. As a result, Active Power shares traded at artificially inflated prices during the Class Period.
Active Power Stock Drops on Retraction of Third Quarter Guidance
On September 5, 2013, according to the complaint, Active Power retracted its 2013 guidance based on disappointing results from the company’s distribution relationship in China. Moreover, the company also revealed that its April 30, 2013 announcement that it had entered into a partnership with Digital China was incorrect. The agreement was with an unrelated entity, Qiyuan Network System Limited. On this news, Active Power’s stock prices fell $0.48, or nearly 14%, to close at $3.02 on September 6, 2013.
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