Sun Sets on Solar Firm’s ‘Loss Causation’ Argument

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By Jennifer Bennett

A solar panel maker must face investor securities fraud claims that it concealed defects in its modules, after a federal appellate court upheld a lower court’s decision about how to identify what caused shareholders’ losses.

A general connection between misrepresented facts and a fall in stock price is all that’s needed for causation in a securities fraud case, the U.S. Court of Appeals for the Ninth Circuit ruled Jan. 31. Because the underlying facts concealed by the alleged fraud are what affect stock price, there’s no requirement that the market know the concealment was due to fraud, the court said.

The lower court used the correct standard and properly declined to grant summary judgment for First Solar Inc., the Ninth Circuit said. The case will continue in the U.S. District Court for the District of Arizona using the general proximate cause test.

Investors sued after First Solar’s stock price dropped about $250 per share when the company disclosed the design defects, the opinion said.

A First Solar representative declined to comment.

The case is Mineworkers ’ Pension Scheme v. First Solar Inc. , 2018 BL 33546, 9th Cir., 15-17282, 1/31/18 .

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To contact the editor responsible for this story: Seth Stern at

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