Shareholder rights firm Robbins Umeda LLP announces that purchasers of Neptune Technologies & Bioressources Inc. (NASDAQ: NEPT) ("Neptune" or the "Company") have filed a complaint in the U.S. District Court for the Southern District of New York. The complaint alleges the Company and certain of its officers and directors violated the Securities Exchange Act of 1934 between December 12, 2011 and November 8, 2012 (the "Class Period"). Neptune is a biotechnology company that develops and commercializes krill oil products for the nutraceutical, pharmaceutical, cosmetic, and pet food markets.
The complaint alleges that the Company issued a series of materially false and misleading statements to investors misrepresenting its business success and future prospects. Specifically, the complaint alleges that defendants made false and misleading statements regarding Neptune's highly publicized expansion of its Sherbrooke production facility because it failed to disclose that it had not acquired the required building permits. The planned expansion would have allowed Neptune to increase its production capacity of krill oil from 150,000 kg per year to 500,000 kg per year, increasing profit margins, revenues, and earnings. Further, according to the complaint, Neptune failed to disclose that it had installed larger than permitted storage tanks in its Sherbrooke facility, allowing the Company to store dangerously high levels of acetone. As a result of these misrepresentations and omissions, Neptune's stock traded at artificially high prices during the Class Period reaching a high of $5.14 per share on July 2, 2012.
Then, on November 8, 2012, an explosion and fire at the Sherbrooke plant destroyed Neptune's only production and storage facility, and damaged its expansion facility, then under construction. On this news, NASDAQ Capital Market halted trading of Neptune's stock until November 26, 2012. When trading resumed on November 27, 2012, Neptune's share price fell $1.18 per share, or approximately 32 percent, from its November 7, 2012 closing price.