Robbins LLP: Enzymotec Ltd. (ENZY) Stock Falls Nearly 40% After Violations of Federal Law are Revealed, According to Class Action
Robbins LLP announces that an investor of Enzymotec Ltd. (NasdaqGS: ENZY) has filed a federal securities class action complaint in the U.S. District Court for the District of New Jersey. The complaint alleges that the company and certain of its officers and directors violated the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the company’s initial public offering on September 27, 2013. Enzymotec develops, manufactures, and markets innovative bio-active lipid ingredients used in various nutritional products.
Enzymotec is Accused of Failing to Disclose Compliance Issues Within the Chinese Market
According to the complaint, shares of Enzymotec first dropped 32% to close at $13.75 on May 14, 2014, after the company disclosed in a press release, along with its first quarter 2014 financial results, that new Chinese regulations will require infant formula manufacturers to make changes to their production line, resulting in lower than expected revenue. On August 5, 2014 shares of Enzymotec declined an additional 40% to close at $9.11 after the company announced that second quarter 2014 financial results were impacted in all aspects by the new Chinese regulations.
The complaint further alleges that Enzymotec made false and/or misleading statements and/or failed to disclose that: (i) the Chinese market was subject to material and readily identifiable compliance regulations from the Chinese government; (ii) the company’s Chinese baby formula business was in jeopardy and subject to decreased revenue; (iii) the company breached its joint venture agreement with AarhusKarlshamn AB, therefore reducing its presence in China; and (iv) as a result, Enzymotec’s positive statements about the company’s business operations and prospects were unfounded.
Enzymotec Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.