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Class action lawsuit alleges securities fraud against First Solar of Tempe

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A federal judge in Phoenix on Tuesday certified a class action lawsuit alleging securities fraud against First Solar and its executives, a company that is selling a Mesa plant that Gov. Jan Brewer once hoped would be a shining example of solar investment.

Steve Krum, a company spokesman, said First Solar, based in Tempe, entered into an agreement last week to sell the plant to a company he declined to name. Krum said the company will do “clean high-tech manufacturing” in the plant.

The company was in line to receive millions of dollars in state and federal incentives, but authorities said they lost out on them when the plant floundered. The Mesa plant was expected to generate 600 jobs.

Brewer hailed the company’s plans to build the plant as “thrilling news for Arizona” and “cements this state’s reputation as a magnet for solar investment.”

Meanwhile, the company has its hands full in court.

Judge David Campbell of U.S. District Court in Phoenix certified the class as all investors who acquired stock between April 30, 2008, and February 28, 2012. Campbell said there is evidence the class is about 1,300 investors and more than 2.9 billion shares were traded.

Krum said he had no comment on the suit or judge’s decision.

The lawsuit alleges the solar panel maker misled the public during that time period about its earnings and problems with defective panels. The company reported on Feb. 29, 2012, that it had spent $215 million to replace defective panels made from June 2008 to June 2009, which caused the value of shares to drop 11 percent.

Krum said the company was in line to receive $17 million in property tax relief and up to $20 million for job creation, but never received those incentives because no manufacturing was ever done at the plant.

Mesa Mayor Scott Smith said he’s disappointed the plant didn’t work out for First Solar, but he’s expecting a new company to occupy the site to create many jobs.

Nicole McTheny, a spokeswoman for the Arizona Commerce Authority, said the company did not meet its milestones and was not awarded any money through ACA.

Andrew Wilder, a spokesman for Governor Jan Brewer, declined to comment.

Clarification: A previous version of the story stated First Solar received $51.5 million in incentives.  After the initial story appeared, Krum and McTheny  said First Solar was awarded incentives, but never received them.

 

 

 

 

 

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