Energy Recovery, Inc. Class Action Lawsuit
- Company Name
- Energy Recovery, Inc.
- Stock Symbol
- Class Period
- August 2, 2017 to June 29, 2020
- Southern District of New York
The Energy Recovery, Inc. class action lawsuit charges Energy Recovery and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Energy Recovery common shares between August 2, 2017 and June 29, 2020, inclusive (the “Class Period”). The Energy Recovery class action lawsuit was commenced on July 21, 2020 in the Southern District of New York and is captioned Visser v. Energy Recovery, Inc., No. 20-cv-05647.
Energy Recovery develops and manufactures technologies utilized in the water desalination industry. In December 2014, Energy Recovery announced the launch of the VorTeq hydraulic pumping system, which was designed to increase run-time and reduce maintenance costs associated with pump failures. On October 19, 2015, Energy Recovery announced that it had signed a fifteen-year deal with Schlumberger Technology Corp., which gave Schlumberger the exclusive right to the use of Energy Recovery’s VorTeq technology (the “Schlumberger Licensing Agreement”).
The Energy Recovery class action lawsuit alleges that defendants made materially false and/or misleading statements, as well as failed to disclose that: (i) Energy Recovery and Schlumberger had different strategic perspectives regarding commercialization of VorTeq, which created a substantial risk of early termination of Energy Recovery’s exclusive licensing agreement with Schlumberger; (ii) accordingly, Energy Recovery’s revenue guidance and expectations of future license revenue were false and lacked a reasonable basis; and (iii) as a result, defendants’ public statements were materially false and misleading at all relevant times or lacked a reasonable basis and omitted material facts.
On June 29, 2020, less than five years into the Schlumberger Licensing Agreement, Energy Recovery announced the termination of the Schlumberger Licensing Agreement, citing “different strategic perspectives as to the path to VorTeq commercialization.” Energy Recovery further announced that, following the termination, “no further payments will be made by either party” and that “Energy Recovery will now be fully responsible for commercialization of the VorTeq technology globally.” On this news, the price of Energy Recovery shares fell nearly 16%, damaging investors.
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