Renewable Energy Group Inc. (NASDAQ: REGI) stock declined by 4.96% in the last trading close, whereas the REGI stock price falls by 6.82% during pre-market after Pomerantz law firm on March 16 announced the case filed against Renewable energy group and its certain officials. REGI is a biodiesel company that provides clean, low carbon transportation fuels. REGI is the largest producer of advanced biofuels with 13 biorefineries and a feedstock processing facility.
What is happening?
As per the recent news, the class action docketed under 21-cv-02244 is filed on behalf of people except for the Defendants, who purchased or acquired Renewable Energy securities between May 3, 2018, February 25, 2021, inclusive (the “Class Period”). The claims are made against the Defendants under the Securities Exchange Act of 1934. The Defendants are accused of making materially false statements, and also they failed to reveal material adverse facts about REGI’s business, operations, and prospects. Following are the major accusations made against Defendants:
- The Defendants of REGI did not inform the people that petroleum diesel was not periodically added to Renewable Energy Group’s specific loads. Still, instead, it was added by the REGI customers due to the failure in the diesel addictive system.
- As a result of the above-mentioned point, Renewable Energy was not the proper claimant of certain BTC payments on Biodiesel that it sold between January 1, 2017 and September 30, 2020.
- Renewable Energy Group is also accused of stating wrong figures of revenue and net income for certain periods.
- Also that REGI’s internal control over financial statements had a material weakness related to the purchase and use of petroleum diesel gallons when blending with biodiesel.
- Lastly, the Renewable Energy Group Defendants’optimistic claims about REGI’s business, activities, and prospects were materially misleading.
Effect of Fourth Quarter and full year 2020 financial results
Renewable Energy Group, On February 25, announced its fourth quarter and full-year 2020 financial results in which REGI disclosed that they would restate $38.2 million in cumulative revenue from January 2018 through September 30, 2020, because REGI was not the justified claimant for certain BTC payments on biodiesel it sold between the time span of January 1, 2017, to September 30, 2020. After this news broke, the REGI stock price fell $8.17, or 9.5%, in two consecutive trading sessions to close at $77.77 per share on February 26, 2021. This has given a significant setback to REGI wherein the investors do not find it a sensible step to investing in REGI stock.
