Loop Industries, Inc. Class Action Lawsuit
- Company Name
- Loop Industries, Inc.
- Stock Symbol
- Class Period
- September 24, 2018 to October 12, 2020
- Southern District of New York
The Loop Industries, Inc. class action lawsuit charges Loop and certain of its executives with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers or acquirers of Loop securities between September 24, 2018 and October 12, 2020 (the “Class Period”). The Loop class action lawsuit was commenced on October 13, 2020 in the Southern District of New York and is captioned Tremblay v. Loop Industries, Inc., No. 20-cv-08538.
Loop is a technology company that purports to own proprietary technology that depolymerizes no- and low-waste PET plastic and polyester fiber. The resulting material is used to create PET resin for food-grade packaging.
The Loop class action lawsuit alleges that during the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) Loop scientists were encouraged to misrepresent the results of Loop’s purportedly proprietary process; (2) Loop did not have the technology to break down PET to its base chemicals at a recovery rate of 100%; (3) as a result, Loop was unlikely to realize the purported benefits of Loop’s announced partnerships with Indorama and Thyssenkrupp; and (4) as a result of the foregoing, defendants’ positive statements about Loop’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
On October 13, 2020, Hindenburg Research published a report alleging, among other things, that “Loop’s scientists, under pressure from CEO Daniel Solomita, were tacitly encouraged to lie about the results of the company’s process internally.” The report also stated that “Loop’s previous claims of breaking PET down to its base chemicals at a recovery rate of 100% were ‘technically and industrially impossible,’” according to a former employee. Moreover, the report alleged that “Executives from a division of key partner Thyssenkrupp, who Loop entered into a ‘global alliance agreement’ with in December 2018, told us their partnership is on ‘indefinite’ hold and that Loop ‘underestimated’ both [the] costs and complexities of its process.” On this news, Loop’s share price fell more than 32%, damaging investors.
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