Lawsuit Claims Neptune Mislead Stockholders

LAVAL, QuébecNeptune Technologies & Bioressources Inc. has been accused of violating the Securities Exchange Act of 1934 in a class action lawsuit. The complaint has been filed on behalf of purchasers of Neptune's stock from Dec. 12, 2011 to Nov. 8, 2012.

However, Neptune released a statement saying it believes the claim is without merit and has substantial legal and factual errors.

The complaint alleged Neptune exaggerated the benefits of the expansion of its sole production facility.  Specifically, the complaint alleged, during December 2011 to November 2012, Neptune issued false and misleading statements regarding its operational status and financial projections, and failed to disclose the following facts:

However, Neptune  defended itself, saying it demonstrated acetone levels stored inside and/or outside its plant or used in the production of its krill oil products did not exceed the levels permitted by the Québec Ministry of Environment.

Neptune acknowledged the Québec Ministry of Environment alleged environmental non-compliance on Nov. 16, 2012. However, the company said the notice was related to specific equipment acquisitions by Neptune and its plant expansion, and had nothing to do with the level or the compliance of acetone levels.

Neptune also said it obtained the required construction permits for its plant expansion and was in the process of obtaining the required environmental permit for the expansion.

Neptune said it continues to work on the implementation of its action plan to resume operations following an explosion in November.

The price of Neptune stock declined between Nov. 8, 2012 before the close of trading, when an explosion and fire destroyed the facility, and Nov. 26, 2012, when the companys stock, which had been halted by the Nasdaq following the explosion, resumed trading and plunged $1.18 per shareapproximately 32 percent of its closing price on Nov. 7, 2012, the evening before the explosion. When the stock resumed on the market, more than 3.8 million shares were traded.

The suit, filed by Robbins Geller Rudman & Dowd LLP on Dec. 19, 2012 in the United States District Court for the Southern District of New York, charged Neptune and certain of its officers with alleged violations of the Securities Exchange Act. The plaintiffs seek to recover damages on behalf of all purchasers of Neptune common stock from Dec. 12, 2011 to Nov. 8, 2012.