Law firm Robins Geller Rudman & Dowd LLP announced this week that it's suing Atlantic Power for alleged false and/or misleading statements concerning the utility's business and finances.
The official complaint (link opens in PDF) charges Atlantic Power with violations of the Securities Exchange Act of 1934 and alleges that the company knowingly supported its 10% payout with unsustainable cash flows even as many of its project contracts were set to expire in 2013.
According to a Robins Geller press release statement, "As the market learned the truth about Atlantic Power's mounting losses and its inability to maintain its outsized dividend through a number of misleading financial disclosures between Nov. 7, 2012, and March 4, 2013, more than $1 billion of the company's market capitalization disappeared."
The class action suit applies to all Atlantic Power stock purchases between July 23, 2010, and March 4 of this year. As of this writing, Atlantic Power hasn't publicly responded to the firm's allegations.
The article Law Firm Files Class Action Suit Against Atlantic Power originally appeared on Fool.com.Fool contributor Justin Loiseau has no position in any stocks mentioned, but he does use electricity. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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