Another day, another story of a Patrick Administration crony capitalist boondoggle. Today on tap is A123 Systems of Waltham, who is the subject of a class action law suit alleging they defrauded investors.
Rigrodsky & Long, P.A. announces that a complaint has been filed in the United States District Court for the District of Massachusetts on behalf of all persons or entities that purchased the securities of A123 Systems Inc. (“A123” or the “Company”) (nasdaqgs:AONE) between February 28, 2011 and March 23, 2012, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
A123, a Delaware corporation headquartered in Waltham, MA, together with its subsidiaries, designs, develops, manufactures, and sells rechargeable lithium-ion batteries and energy storage systems worldwide. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and failed to disclose materially adverse facts, about the Company’s business, operations and prospects. Specifically, the Complaint alleges that the Company had severe manufacturing deficiencies at its Livonia, Michigan manufacturing facilities, causing the production of defective prismatic cells that caused premature failure of battery modules and packs; and, as a result of these product defects, A123 would likely be required to recall and replace the parts at substantial costs, threatening the financial viability of the Company.
A123 has been the recipient of State loan guarantees through the Massachusetts Clean Energy Center. The Clean Energy center is funded through a surtax on every electric bill in the Commonwealth. The tax was imposed as part of the 2008 Green Jobs Act. The tax costs each ratepayer $0.29 per month.
On the 40th Anniversary of Earth Day, Governor Deval Patrick announced the expansion of Watertown-based A123 Systems fueled by $5 million in financing from the Massachusetts Clean Energy Center to help A123 expand facilities and create more than 250 jobs.
To help facilitate A123 System’s expansion, the Massachusetts Clean Energy Center (MassCEC) has approved a $5 million forgivable loan for the Watertown-based company contingent on it hitting job creation and private investment milestones. The company anticipates making $80 million in capital expenditures in Massachusetts to build up its manufacturing and R&D capabilities here by the end of 2014.
Not only did they receive the loan guarantees from a quasi-public agency created by the Patrick Administration, another non-profit funded with taxpayer money gave them a Gold Medal Award.
MassEcon (the Massachusetts Alliance for Economic Development) held its Eighth Annual Team Massachusetts Economic Impact Awardluncheon on November 22nd at 12 noon at the Seaport Hotel in Boston. Companies from across the Commonwealth were recognized for their outstanding contributions to the Massachusetts economy. Over 400 people attended the event, including featured speaker Governor Deval Patrick, Secretary of Housing and Economic Development Greg Bialecki, andaward presenter WCVB-TV, Channel 5’s longtime news anchor, Anthony Everett.
Another day, another crony-capitalist green-energy fail by the Patrick Administration.