Law Offices Of Howard G. Smith, Representing Investors Of Ormat Technologies, Inc., Announces Class Action Lawsuit
Law Offices of Howard G. Smith, representing investors of Ormat Technologies, Inc. (“Ormat” or the “Company”) (NYSE:ORA), has filed a class action lawsuit in United States District Court on behalf of a class (the “Class”) consisting of all persons or entities who purchased Ormat securities between May 6, 2008 and February 24, 2010, inclusive (the “Class Period”). The class action lawsuit was filed in the United States District Court for the District of Nevada.
The Complaint charges Ormat and certain of the Company’s executive officers with violations of federal securities laws. Ormat and its subsidiaries engage in the geothermal and recovered energy power business in the United States and internationally. The Complaint alleges that throughout the Class Period defendants misrepresented and/or failed to disclose: (1) that the Company was improperly continuing to capitalize costs for individual projects after Ormat had decided to abandon further exploration and development of individual projects instead of expensing those costs in the period in which any such determination was made; (2) that, as a result, the Company’s financial results were overstated during the Class Period; (3) that the Company’s financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); (4) that the Company lacked adequate internal and financial controls; and (5), as a result of the above, that the Company’s financial statements were materially false and misleading at all relevant times.
On February 24, 2010, Ormat disclosed that the Board of Directors and Audit Committee of the Company, upon recommendation of management, had concluded that the Company’s financial statements in its Annual Report on Form 10-K for the year ended December 31, 2008, require restatement and should no longer be relied upon and, additionally, that the Company’s prior related earnings and news releases and similar communications should also no longer be relied on to the extent they related to the 2008 financial statements. The Company announced that the restatement would show a change in Ormat’s accounting treatment for certain exploration and development costs capitalized on an “area-of-interest” basis, which the Company concluded was inappropriate in certain respects after review of this accounting treatment in response to comment letters from the staff of the Securities and Exchange Commission. The Company disclosed it will no longer continue to capitalize these costs for any individual project after it decides to abandon further exploration and development of that project, and will instead expense those costs in the period in which any such determination is made. Ormat additionally indicated that, as a result, the Company also planned to revise its consolidated financial statements as of and for the three and nine months ended September 30, 2009.
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