A class action has been filed in the United States District Court for the District of Colorado on behalf of purchasers of Vestas Wind Systems A/S (OTC:VWDRY.ob) (OTC:VWSYF.ob) securities during the period between October 27, 2009 and October 25, 2010 (the “Class Period”). The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial revenues and earnings, as well as its fiscal year 2010 financial guidance. As a result of defendants’ false and misleading statements regarding the Company’s financial performance and outlook, Vestas’ American Depository Receipts (“ADRs”) and ordinary shares traded at artificially inflated prices throughout the Class Period, reaching a high of $26.00 and $78.05 per share, respectively, on November 9, 2009.
On August 17, 2010, Vestas issued its second quarter 2010 results and downwardly revised its 2010 financial outlook for revenue and earnings, admitting that hundreds of millions of Euros of wind system contracts expected to be recognized in 2010 — particularly in the United States — would have to be deferred. On this news, the Company’s ADRs and ordinary shares trading in the United States declined 22.5% in one day. Two months later, on October 26, 2010, before the U.S. markets opened, the Company admitted that it had failed to adopt the International Financial Reporting Interpretations Committee’s Interpretation 15, Agreements for the Construction of Real Estate (“IFRIC 15”), a new accounting standard effective January 1, 2010, and as a result its 2010 financial statements would likely require correction as they were not in compliance with International Accounting Standards (“IAS”). In reaction to this news, Vestas’ securities dropped another 10%.
According to the complaint, the true facts, which were known by defendants but concealed from the investing public during the Class Period, were as follows: (a) defendants caused Vestas to improperly account for its revenue in violation of IAS by failing to timely adopt IFRIC 15; and (b) defendants failed to account for the effect of IFRIC 15 in determining Vestas’ financial outlook and as a result they lacked a reasonable basis to provide financial guidance for the Company’s fiscal year 2010.
If you are a current shareholder and purchased during the period October 27, 2009 and October 25, 2010 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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