CASES
VeraSun Energy Corp.
Class Period: Mar 12, 2008 to Sep 16, 2008
Lead Plaintiff Deadline: Jan 11, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against VeraSun Energy Corp. (VSUNQ.PK) ("VeraSun" or the "Company") on behalf of all securities purchasers from March 12, 2008 through September 16, 2008, inclusive ("Class Period"), in the United States District Court for the Southern District of New York.
The complaint alleges that throughout the Class Period, defendants failed to disclose material adverse facts about VeraSun's true financial condition, business and prospects. Specifically, defendants failed to disclose the following adverse facts, among others: (i) VeraSun was, in part, a speculative commodities trader in addition to an ethanol producer; (ii) VeraSun engaged in speculative and risky derivate transactions that exposed the Company to substantial financial and liquidity risk; (iii) VeraSun experienced substantial loses on speculative derivative transactions causing margin pressures on the Company; (iv) as a result of margin pressures from bad speculative derivative transactions, the Company sold out of a large short position in corn and incurred substantial losses; (v) the Company entered into highly risky "accumulator" contracts that obligated VeraSun to purchase increasing amounts of corn after the price of corn fell in price per bushel; and (vi) VeraSun's financial condition and especially its liquidity were negatively impacted as a result of speculative commodity transactions, ultimately causing the Company to file for bankruptcy.
On September 16, 2008, VeraSun announced that it commenced a public offering of 20 million shares of its common stock to raise money for "general corporate purposes." The true purpose of this public offering was to raise capital in an effort to prevent a disastrous impact from the huge losses experienced by the Company as a result of its speculative trading and risky bets on the price of corn. In response to the Company's announcement on September 16, 2008, shares of the Company's stock fell $3.81 per share, or 70%, from a close of $5.22 per share before the announcement, to close at $1.41 per share on September 17, 2008, on extremely heavy trading volume.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.