On May 19, 2023, Judge Victor Marrero of the United States District Court for the Southern District of New York granted a motion to dismiss a putative securities class action against a solar equipment manufacturing company (the “Company”) alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act (the “Exchange Act”) and Sections 11 and 12(a)(2) of the Securities Act (the “Securities Act”). Plymouth Cnty. Ret. Ass’n v. Array Techs., Inc., No. 21-cv-04390 (S.D.N.Y. May 19, 2023). Plaintiffs alleged that the Company failed to warn investors about the impact rising steel prices would have on its business and misled investors about its business prospects in filings associated with the Company’s October 2020 initial public offering (“IPO”) and subsequent secondary public offerings (“SPOs”). The Court dismissed the complaint in its entirety with leave to amend.
The Company manufactures equipment that allows solar panels to move throughout the day to optimize exposure to the sun. The equipment is made mainly of steel. The Company conducted several public offerings in 2020 and 2021. In early 2020, at the beginning of the COVID-19 pandemic, demand for steel fell sharply, causing steel mills to reduce production or cease operations. As the economy reopened in late 2020, demand for steel rebounded. However, months of decreased production and supply chain disruptions caused the price of steel to rise. Approximately six weeks after the close of an SPO in March...
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